Three ex-brokers face 'fraud' cases
A former City broker known as "Lord Libor" has been charged over his alleged role at the centre of a rate-rigging scandal that saw UK and US regulators hand out £54 million in fines.
Colin Goodman, who worked for ICAP, is facing up to 30 years in prison along with fellow brokers Darrell Read and Daniel Wilkinson after fraud allegations against them were filed at a Manhattan court.
It is claimed that in pursuit of bigger bonuses the three men manipulated interbank lending rates for the Japanese yen to help a trader from Swiss bank UBS make millions of dollars on financial markets.
Emails detailed in US court papers showed Goodman was told to "cane the wine bill" when meeting UBS traders and that one might "come over and buy you a curry", during alleged exchanges about the practice.
Read was said to have told a trader that Goodman was "ok with an annual champagne shipment, a few p*** ups... and a small bonus every now and then".
In another message detailed in the FBI deposition, and signed "Mlord libor", he allegedly wrote: "How's my bonus pot looking?" It is alleged that he was later paid £5,000 a quarter.
ICAP was fined 65 million US dollars (£40.5 million) by America's Commodity Futures Trading Commission (CTFC) and £14 million by the UK's Financial Conduct Authority (FCA).
The London-based firm, run by former Conservative party treasurer Michael Spencer, is the fourth organisation to be penalised over the Libor-rigging scandal after a £290 million hit on Barclays, £940 million for UBS and £391 for Royal Bank of Scotland.
The scandal centres on the manipulation of the rates which govern the price of hundreds of trillions of dollars worth of loans and transactions around the world, including household mortgages, credit cards and student loans.
The FCA said the misconduct by ICAP involved three brokers, including one manager, who were "central to the collusion" with seven other individuals across three desks also participating.
It said UBS made at least 330 written requests to brokers at the firm for "inappropriate submissions" in relation to the rates, as well as countless oral requests.
Tracey McDermott, FCA director of enforcement and financial crime, said Libor-fixing "cast a shadow over the financial services industry" and the findings showed individuals having "a cavalier disregard" for regulation and the interests of markets.
She said ICAP's failings in "culture and controls" allowed the misconduct to flourish.
In Washington, the CFTC said that ICAP brokers "knowingly disseminated false and misleading information" about yen borrowing rates to manipulate, at times successfully, the daily yen Libor rate.
It said the brokers did so to help a "highly valued client" in his "relentless attempts to manipulate yen Libor".
David Meister, the CFTC's director of enforcement, said: "ICAP and other interdealer brokers are expected to be honest middlemen. Here, certain ICAP brokers were anything but honest."
Meanwhile the US Department of Justice charged former brokers Wilkinson (who was a desk director), Goodman and Read - who now lives in New Zealand - with conspiracy to commit wire fraud and two counts of wire fraud.
A Crown Prosecution Service spokesman said he could neither confirm nor deny whether an extradition request had been made or would be made.
ICAP chief executive Mr Spencer said: "We deeply regret and strongly condemn the inexcusable actions of the brokers who sought to assist certain bank traders in their efforts to manipulate yen Libor."
He said none of the three at the centre of the activity remained with the firm while others were no longer with the company or were being disciplined.
"There were no findings that any senior management were involved in this matter nor that the firm engaged in deliberate misconduct."