ICAP says no reason to believe its brokers linked to forex probes

Wed Nov 13, 2013 5:36am EST
 
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By Tommy Wilkes

LONDON (Reuters) - ICAP, the world's largest interdealer broker, said on Wednesday it had no reason to believe any of its brokers are linked to an alleged manipulation of foreign exchange markets under investigation by financial watchdogs.

Regulators in the United States, Asia and Europe are looking into possible manipulation of foreign exchange benchmarks, used to price trillions of dollars worth of investments and deals and relied upon by companies, investors and central banks.

The company, which makes money by matching buyers and sellers of bonds, swaps and currencies, said the bulk of its business in foreign exchange is conducted on electronic platforms rather than through brokers on the telephone.

On a conference call following publication of its half-year financial results, the company was asked whether it believed any staff could be connected to the alleged currency rate fixing.

Group General Counsel Duncan Wales said: "We have no current reason to believe that."

The foreign exchange allegations have echoes of the Libor rate rigging scandal, where six institutions have been punished, including five banks and ICAP. In the Libor case, prosecutors and regulators have said some of ICAP's brokers acted as conduits for information at the center of the scheme.

ICAP was fined $87 million by British and U.S. authorities in September over the role of its brokers in Libor-rigging. Criminal charges were also filed against three of its former employees.

ICAP's foreign exchange and money markets business includes dealing in spot and forwards, cash products and a joint venture in FX options, as well as its electronic trading platform EBS.   Continued...

 
A sign is seen on an ICAP office in the City of London September 25, 2013. REUTERS/Toby Melville