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That was part of billions of euros of fines levied by regulators against financial institutions in
connection with probes into manipulation of the London interbank offered rate, or Libor, and
other widely used financial benchmarks.
Settle Charges
Authorities are probing how derivatives traders and bankers colluded on
interest-rate data to ensure benchmarks benefited them, potentially affecting
more than $300 trillion of loans, financial products and contracts tied to the
rate.
UBS Group AG, Royal Bank of Scotland Group Plc, Deutsche Bank AG,
JPMorgan Chase & Co., Citigroup Inc. and brokerage RP Martin Holdings Ltd.
previously agreed to a combined EU penalty of 669.7 million euros.
ICAP refused to join financial institutions in paying fines to settle the EU case
in 2013. Its already paid fines of $88 million in a deal with U.S. and U.K.
regulators to settle charges over contacts with UBS traders.
The EU said ICAP facilitated six out of seven separate yen Libor cartels
between 2007 and 2010. It said the broker told lenders its yen-Libor
predictions to try to influence them to send similar rates to the panel, used
other contacts with banks to sway submissions and served as a
communications channel between a Citigroup and an RBS trader.
Broker Fines
The ICAP fine far outweighs the 247,000-euro penalty that another broker, RP
Martin, agreed to pay last year after it settled with the EU over involvement in
one cartel.
The EU said the ICAP penalty reflected the gravity, duration and nature of
ICAPs involvement as a facilitator as well as the need to ensure that the fine
has a sufficiently deterrent effect.
JPMorgan Chase & Co., HSBC Holdings Plc and Credit Agricole SA also
refused to join a parallel settlement over Euribor rates and were sent an EU
antitrust complaint last year. Credit Agricole has complained to the EUs
ombudsman, saying the commission has prejudged the outcome of the probe.
ICAP had also filed a complaint.
Interdealer brokers such as RP Martin and ICAP act as go-betweens for banks
that trade bonds, stocks, currencies, energy and derivatives.
Brokers assumed greater influence as credit markets froze during the early
stages of the financial crisis in 2007. Bankers who made submissions to Libor,
the London Interbank Offered Rate, increasingly relied on information from
the brokers to determine what figures to contribute because there were no
trades on which to base them. That left the benchmark vulnerable to
manipulation by traders trying to profit from bets on derivatives.