Icap boss Michael Spencer was today told to “raise his game” after the firm was hit by an embarrassing £55 million fine for its role in the Libor scandal.
Leading institutional investors say they expect change at the inter-dealer broker following the rebuke from UK and US regulators.
They found that brokers at the group had colluded to fix yen Libor interest rates with UBS trader Tom Hayes.
Three former employees responsible for the misconduct have been charged in New York with conspiracy to commit fraud and wire fraud. Kiwi Darrell Read and Britons Daniel Wilkinson and Colin Goodman face up to 30 years in prison if convicted. The disclosures suggested that Goodman — who became known as “Lord Libor” — received alleged kickbacks beginning with curry and champagne and progressing to money.
“As we all know, Libor pushed Bob Diamond over the edge and this could be seen in the same context,” one leading fund manager said. “We may have been expecting yesterday’s fine but the details are pretty shocking.”
Another added: “The blame seems to be on individuals at Icap rather than executives, yet Michael Spencer is going to have a tough time explaining to shareholders exactly what he plans to do to address this, and all areas of Icap’s culture — including remuneration and compliance — are going to be under scrutiny. Let this be a lesson for other executives.”
Spencer, who is a former Tory party treasurer and one of the Square Mile’s best-known entrepreneurs, is known to be furious about the behaviour of the traders. He said senior executives at the broker were not aware of the wrongdoing and has vowed to ensure it does not happen again.
“I deeply regret and strongly condemn the inexcusable actions of these brokers,” he said.