Three former brokers ICAP brokers are being charged by UK prosecutors with manipulating European interest rate markets, according to a report.

UK iCAP

UK’s Serious Fraud Office (SFO) announced that it was charging the three brokers – Daniel Wilkinson, 47 years old, Darrell Read, 49, and Colin Goodman, 52 – along with ten other traders.  The brokers are charged with manipulating the LIBOR interest rate market to improve their trading profits.  LIBOR is used by many banks to set interest rates used in home mortgages. The trio has also been charged by the US Justice Department with similar fraud related issues, but their lawyers prefer them facing the lighter charges in the UK, according to the report.

Large banks settle charges

Last September ICAP, among the largest institutional interdealer brokers in England, settled charges against the company in the issue and paid a $87 million penalty, which was followed by the firm CEO apologizing for their conduct.  UBS and Barclays had previously settled charges over Libor issues.  As previously reported in ValueWalk, UBS acknowledged that its employees were involved in manipulating Libor as well as other benchmark rates, including euro interbank offered rate (Euribor) and Tokyo interbank offered rate (Tibor). Together, these benchmarks form the basis for interest rates on over $350 trillion dollars worth of financial securities around the world.

“This goes much, much higher than me”

Reports have indicated a rift between UK SFO and the US Department of Justice exists over jurisdictional issues in the case. In late 2012, after the US DoJ charged former UBS and Citigroup trader Tom Hayes, a man they believed to be the ringleader in the Libor case, the SFO charged him, preventing his extradition.  After pleading guilty to the UK charges, he was quoted as saying “this goes much, much higher than me.”

The DoJ and SFO have glossed over any potential disagreement.

“We have very good relations with the DOJ and have regular contact with them about our mutual intentions in this investigation,” Nilima Fox, an SFO spokeswoman, told WSJ.  Not to be outdone, US Justice Department spokesman Peter Carr was quoted as saying, “We have a good, productive relationship with the U.K. Serious Fraud Office and other partners throughout the globe.”

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