ICAP fined $87m over Libor: how the scandal has unfolded
Broker agrees to pay American and British regulators over rate rigging, as traders face charges
FINANCIAL firm ICAP has agreed to pay out $87m to US and British regulators after allegations that it manipulated Libor interest-rates, and three of its former employees have been charged with wire fraud in New York, a criminal offence that could see them jailed for decades.
ICAP, a brokerage firm run by former Conservative Party treasurer Michael Spencer, is by no means the first major financial company to be caught up in the scandal. It comes after Barclays, the Royal Bank of Scotland and UBS of Switzerland agreed to pay a combined $2.5bn in fines related to claims surrounding the London inter-bank lending rate (Libor). Here are some of the key moments since the scandal erupted last year:
June 2012: Investigators find that many big investment banks had profited by manipulating Libor, the rate at which banks in London lend money to each other for short-term use. The scandal rocks public confidence in banks, as the rate underpins trillions of pounds worth of loans and financial contracts. Barclays is fined £290m after some of its traders are found to have attempted to rig the rate. This leads to the resignation of the bank's chief executive Bob Diamond, chairman Marcus Agius and chief operating officer Jerry del Missier.
[B]December 2012: Swiss bank UBS is fined $1.5bn by US, UK and Swiss regulators for attempting to manipulate Libor. Terry Farr and James Gilmour, former brokers at RP Martin, and Tom Hayes, a former trader for UBS and Citigroup, become the first individuals in the UK to be arrested over the scandal. Hayes and another former UBS trader, Roger Darin, are also charged by US prosecutors with conspiracy to manipulate the rate.
February 2013: The Royal Bank of Scotland agrees to pay $612m to settle US and UK investigations that it manipulated Libor. The bank acknowledges that employees, including 21 traders and one manager, had tried to rig the rate.
June 2013: Hayes is charged by the Serious Fraud Office with eight counts of conspiracy to defraud.
July 2013: Farr and Gilmour are subsequently charged in the UK with conspiracy to defraud.
September 2013: ICAP, the world's biggest interdealer broker, agrees to pay $87m to regulators. Three of its former employees are also now facing criminal charges in the US. They all face one count of conspiracy to commit wire fraud, while two face further counts of wire fraud. The men, Darrell Read, Daniel Wilkinson and Colin Goodman, could face up to 30 years in prison for each count, according to American prosecutors.
So far no individuals have been convicted for their role in the global scandal. Other banks including Rabobank and Deutsche Bank are still under investigation and are expected to face fines in due course. ·