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UK Politics

Heat raised on Tory donor as Libor fixing file is passed to SFO

Criminal charges could be a possibility for brokers who worked  for Michael Spencer

Brokers who worked for the firm founded by the Tory donor Michael Spencer could face criminal charges in the UK, after City watchdogs passed a file on Libor fixing to the Serious Fraud Office.

It is understood that while the three Icap brokers who allegedly played a central role in helping their top client to fix yen Libor interest rates are facing charges in the US, the SFO’s inquiry could draw in some or all of the unnamed seven Icap brokers judged to have had more “peripheral” roles.

Libor, or the London Interbank Offered Rate, is the average interest rate estimated by banks that they would be charged if borrowing from other banks. It acts as a benchmark for short-term rates around the world.

The SFO is also investigating the conduct of traders at a number of City banks. Icap was hit with £55m in fines from watchdogs on both sides of the Atlantic on Wednesday, the first non-bank to be fined after penalties on UBS, Barclays and Royal Bank of Scotland. More are expected to follow.

Despite a growing political storm surrounding Icap, it emerged that the firm’s high-profile chief executive, Michael Spencer, will attend the Conservative Party conference. Senior Conservative sources suggested that Mr Spencer would be “welcome” at the event, which gets under way this weekend. The former party treasurer raised more than £120m for the Tories between 2005 and 2010 and has made personal donations in excess of £500,000.

As well as being popular in the party, he has a powerful following in both the City and the wider business community, neither of which would take kindly to any perceived snub.

Senior Tory sources would not confirm if he was due to attend any events with David Cameron or George Osborne, which he has done in the past. But they made clear he would not be “cold shouldered” by them.

Labour sought to keep up the pressure with Michael Dugher, the party’s vice-chairman, describing his attendance as “entirely inappropriate”.

“Despite Michael Spencer’s company being fined £55m it seems he will still have unrivalled access to the Prime Minister and the Chancellor. It just shows that David Cameron stands up for the wrong people because he mixes with the wrong crowd.”

Ed Miliband attempted to draw a distinction between Labour, which he claimed was the champion of ordinary people, and the Conservatives, as the friend of special interests, in his speech earlier this week.

Mr Spencer walked the trading floor at the group’s London HQ on Thursday.

He also personally emailed all the company’s top 20 investors and has promised a shake-up at the company he founded and which has helped him amass an estimated fortune of £500m. He is furious at the behaviour of the brokers involved in the affair and the damage it has done to Icap.

The London-listed firm is the world’s biggest “interbroker dealer” – which are companies that act as middlemen, allowing banks and other financial institutions to anonymously trade a range of financial products.

Mr Spencer has said he is willing to meet any investors that wish to see him in the wake of the scandal.However, sources close to the company indicated that there has yet to be any requests made by the company’s top shareholders. That makes his attendance at conference almost certain.