FCA has fined ICAP Europe Limited £14 million for misconduct relating to LIBOR. It found the breaches of its Principles, which lasted for four years, involved a significant number of brokers including two managers. Many of the failings are similar or related to those against which the regulator has already taken action against others. They included brokers colluding with traders at UBS to manipulate the Yen LIBOR rates for the benefit of the traders. This involved several tactics, including emailing deliberately incorrect suggestions on expected rates to some banks, requesting the banks make specific submissions and, in one case, a manager instigating a corrupt bonus for a broker who helped to manipulate the rates. FCA found that three brokers (including one manager) were central to the collusion and at least seven other individuals (including another manager) participated. It said:
- the firm's risk management systems and controls were inadequate to monitor and oversee the relevant broking activity;
- the policies and procedures in place to govern individual broker behaviour were insufficient to deal with collusion between brokers and their clients;
- the brokers' misconduct was exacerbated by a poor compliance culture within the firm, resulting from the firm being driven by revenue rather than compliance; and
- the firm's inadequate systems, controls, supervision and monitoring allowed the misconduct to go undetected for a long time.
(Source: FCA Fines Broker over Benchmark Failings)