Employees of Icap and Collins Stewart, two of Britain's biggest independent brokers, were among a group of traders charged in New York yesterday with carrying out a complex money laundering fraud.
The investment banks JP Morgan, UBS, Dresdner Kleinwort Wasserstein and Société Générale were also among the companies whose staff were led away in handcuffs from their desks by FBI agents. None of the companies themselves faces charges in relation to the case.
The group of 47 individuals faced charges after a dramatic series of swoops on Tuesday afternoon across three US states.
The arrests were the culmination of a year-and-a-half -long investigation by the FBI named "operation wooden nickel", which involved taping hundreds of hours of secret meetings between the group in a Wall Street "boiler room" or trading floor in the World Financial Centre in Lower Manhattan.
The US attorney James Comey made a statement after the FBI arrests, saying: "Today's charges run the gamut of fraud. With more than 1,000 victims from small investors to large banks, the losses are in the millions."
The group is thought to have taken about $4m (£2.4m) from clients and companies. A number of different American authorities, including the Securities and Exchange Commission and the Commodities Futures Trading Commission, are looking at frauds against individual investors and separately against financial institutions.
The crackdown is the most dramatic example of the zeal with which US regulators are pursuing financial institutions for breaches of financial regulations. Eliot Spitzer, the New York attorney general, has already forced a number of banks to hand over $1.4bn to settle separate allegations this year.
Michael Spencer, the chief executive of Icap, which specialises in settling deals between institutional investors, said the likelihood that his company had lost money due to the scam was "minuscule". However, Icap's shares fell 5 per cent to 1,352p.