Broker fined over Libor rate rig

City broker RP Martin has been fined more than £1.3 million by UK and US regulators over allegations related to Libor rate-rigging.

A broker has been fined in a Libor rate rigging case.
A broker has been fined in a Libor rate rigging case.

Britain's Financial Conduct Authority (FCA) imposed a £630,000 fine, reduced from £3.6 million after it found it was not able to pay the sum in addition to other penalties it faces over the scandal.

The firm has also paid 1.2 million US dollars (£714,000) to the US Commodity Futures Trading Commission (CFTC).

It relates to attempts to manipulate the Libor rate for the Japanese yen - a benchmark interest rate used for trillions of dollars of transactions.

The CFTC said that between September 2008 and August 2009, brokers on its yen desk "knowingly disseminated false and misleading information" on yen borrowing rates to manipulate Libor.

It said Martins accepted more than 400,000 US dollars (£238,000) for "unlawful manipulative assistance" to traders.

The FCA fine relates to similar conduct between January 2007 and December 2010.

Tracey McDermott, director of enforcement and financial crime, said: "Interdealer brokers are expected to act as trusted intermediaries and are key conduits of market information. Martins abused this position of trust by providing false information.

"The culture at Martins was that profit came first. Compliance was seen as a hindrance."

Gretchen Lowe, acting director of the CFTC's enforcement division, said: "Today's action is part of our on-going efforts to ensure that the Libor rate is free of fraud and manipulation.

"Further, this action reflects the Commission's unwavering commitment to hold those who seek to undermine the integrity of the US financial markets responsible for their actions."

It comes after RP Martin paid 247,000 euro (£202,000) last December as part of a larger 1.7 billion euro settlement with European regulators which saw a raft of global banking giants face larger penalties.

The firm said in a statement: "RP Martin's new senior management team co-operated fully with the FCA and CFTC in their investigations and entirely respect the fine and sanctions imposed.

"Over the last 12 months the board comprehensively restructured the firm's governance, systems and controls, and compliance procedures."