By Tom Fairless and Rory Gallivan
European Union regulators on Tuesday accused interdealer broker
ICAP PLC of helping banks manipulate the yen Libor benchmark
interest rate, three weeks after filing similar charges against
three banks.
The charges are the latest stage of a two-year investigation by
EU antitrust authorities, one in a series of probes into alleged
market abuse by financial institutions.
London-based ICAP said it received a so-called statement of
objections from the European Commission, the EU's executive arm,
"alleging that ICAP acted as a facilitator to breaches of EU
competition law by certain banks in relation to Yen Libor for
isolated periods between 2007 and 2010."
ICAP said it didn't believe it had breached any applicable EU
competition law and that it would vigorously defend itself against
the allegations.
The company, which matches buyers and sellers of bonds,
currencies and financial derivatives, said the allegations relate
to the same matters it paid $87 million to settle in September with
U.K.'s Financial Conduct Authority and the U.S. Commodity Futures
Trading Commission. That settlement resolved civil allegations that
ICAP's brokers helped bank traders rig the London interbank offered
rate, or Libor, and other benchmarks that underpin interest rates
on trillions of dollars of financial contracts.
The commission's statement of objections, which lists the
charges against ICAP, is the next stage in its investigation after
the company refused to settle with EU authorities last year.
In December EU regulators fined six financial institutions
EUR1.71 billion for colluding in an attempt to manipulate key
benchmark interest rates in what was its largest-ever penalty in a
cartel case. The settlements involved penalties against Deutsche
Bank AG, Société Générale SA, Royal Bank of Scotland Group PLC,
J.P. Morgan Chase & Co. and Citigroup Inc. R.P. Martin Holdings
Ltd., a small London cash broker, was also penalized.
At the time, Joaquín Almunia, the EU's competition commissioner,
said his office was pursing cartel proceedings against several
other groups including ICAP for their alleged roles in colluding to
rig one or more rates.
The commission will now consider ICAP's arguments before making
a final decision. If it finds the company guilty, it can impose
fines of up to 10% of its annual world-wide turnover.
Last month, the commission accused J.P. Morgan, HSBC Holdings
PLC and Credit Agricole SA of participating in a cartel to rig the
euro interbank offered rate, or Euribor. The three banks denied the
charges.
Write to Tom Fairless at tom.fairless@wsj.com and Rory Gallivan
at rory.gallivan@wsj.com
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