Regulator levels $65 million fine over LIBOR rate rigging

LIBOR is used as the benchmark for trillions of dollars worth of transactions around the world.

The ICAP brokers, including one known as “Lord LIBOR” primarily sought to manipulate the rate to abet a valued client – a senior Yen derivatives trader at UBS Securities Japan Co., Ltd, according to the CFTC.

“They repeatedly abused their trusted role when they infected the financial markets with false information to aid their top client’s manipulation of LIBOR," said David Meister, the CFTC’s Director of Enforcement. "As should be clear from today’s action, any market participant who seeks to undermine the integrity of a global benchmark interest rate must be held accountable.”

Beyond the $65 million civil penalty, the CFTC’s order requires to cease and desist from the alleged behavior and take steps to ensure it does not happen again, the agency said.

CFTC Commissioner Bart Chilton said email exchanges between the accused parties showed disregard for proper protocols, with promises of champagne and requests for kickbacks and free meals in exchange for the manipulation.

“These benchmarks are just too important to become a playground for some big-talking bad guys,” Chilton said.

Gary Gensler, the agency’s chairman, said the LIBOR revelations expose the need for greater coordination between international regulators and highlights the importance of efforts to increase regulation of the derivatives market under the Dodd-Frank Act.