CFTC Charges ICAP Europe Limited with Manipulation of Yen LIBOR

The CFTC issued an Order with regard to interdealer broker ICAP Europe Limited ("ICAP"), bringing and settling charges of manipulation, attempted manipulation, false reporting, and aiding and abetting derivatives traders' manipulation relating to the London Interbank Offered Rate ("LIBOR") for Yen. The CFTC's Order states that, for more than four years, ICAP brokers knowingly disseminated false and misleading information on ICAP's Yen derivatives and cash desks concerning Yen borrowing rates to market participants. The Order also alleges that ICAP brokers attempted to manipulate the official fixing of the daily Yen LIBOR so as to aid and abet a senior Yen derivatives trader employed at UBS Securities Japan Co., Ltd. To accompany the Order, the CFTC has also issued a document titled, "Examples of Misconduct from Written Communications," which provides an example script of the ICAP Yen brokers' improper LIBOR suggestions.

With this Order, the CFTC has now imposed penalties of just under $1.3 billion on entities for manipulative conduct with respect to LIBOR submissions and other benchmark interest rates.

CFTC Chairman Gary Gensler issued a statement on the CFTC's action against ICAP, stating that the Order once again shows how LIBOR is not anchored sufficiently in transactions and, thus, is subject to rigging. Gensler also said that this is "yet another reminder of why we have to coordinate internationally to transition to an alternative to LIBOR." CFTC Commissioner Bart Chilton issued a similar statement, congratulating the CFTC Division of Enforcement for bringing another LIBOR manipulation case.

See: CFTC Order against ICAP; CFTC Press Release.See also: CFTC Examples of Misconduct from Written Communications; Chairman Gensler's Statement; Commissioner Chilton's Statement.