FROM: COMMODITY FUTURES TRADING COMMISSION
CFTC Charges ICAP Europe Limited, a Subsidiary of ICAP plc, with Manipulation and Attempted Manipulation of Yen Libor
ICAP Europe Limited Ordered to Pay a $65 Million Civil Monetary Penalty
Statement of Chairman Gary Gensler on Settlement Order against ICAP
September 25, 2013
Washington, DC — Commodity Futures Trading Commission (CFTC) Chairman Gary Gensler today made the following statement on the CFTC’s enforcement action that requires ICAP Europe Limited to pay a $65 million penalty for unlawful conduct related to LIBOR for yen:
“Today’s Order against ICAP once again shows how LIBOR, a critical benchmark interest rate not anchored in sufficient transactions, has been readily rigged. Unfortunately, this is yet another reminder of why we have to coordinate internationally to transition to an alternative to LIBOR to best restore the integrity to markets.
“Today’s Order also highlights the importance of Congress’ reforms through the Dodd-Frank Act to bring oversight to swaps trading platforms. Required registration of swap execution facilities becomes a reality next week, finally closing exemptions that had allowed for unregistered, multilateral swaps trading platforms."
FROM: COMMODITY FUTURES TRADING COMMISSION
“Champagne and Ferraris”
Statement of CFTC Commissioner Bart Chilton on the ICAP Order
September 25, 2013
Here we are, sadly, with traders again behaving badly. Another bust, another one bites the dust.
In this instance, ICAP brokers attempted to falsely report Libor rates in order to advantage another trader. This was insolent conduct impacting a benchmark rate that influences almost anything consumers buy on credit. These benchmarks are just too important to become a playground for some big-talking bad guys.
Email exchanges exhibit total disregard for proper protocols. In one case, champagne was promised for a favorable fixing. Some sought increased kickbacks or free meals—a curry meal for currying favors. One even mentioned (perhaps in jest) a Ferrari as payment for the favors. “They are making fortunes with these high fixings,” said one communication.
The attempts to manipulate Libor have been a black eye for our global financial system. It’s good that we have made progress at cleaning up this monstrous mess. I congratulate our Division of Enforcement for cracking yet another of these cases and appreciate the cooperative working relationship we have had with the Financial Conduct Authority in the U.K.
Let's hope other would-be crooks learn a lesson here and stay clear of future violations.
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