U.S. and British authorities are hours away from fining ICAP, the world's biggest interdealer-broker, and charging current and former staff in connection with the manipulation of the Libor benchmark interest rate.
The rate rigging scandal, which has laid bare the failings of regulators and bank bosses, has already seen three banks fined $2.6 billion, four individuals charged, scores of institutions and traders grilled and a spate of lawsuits launched.
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The U.S. Department of Justice (DoJ) is expected to announce criminal charges against individuals later on Wednesday, alongside a civil ICAP settlement of around $100 million unveiled by the U.S. Commodity Futures Trading Commission (CFTC) and UK Financial Conduct Authority (FCA), according to sources close to the investigations.
ICAP, run by London businessman Michael Spencer, will be the first interdealer broker to be sanctioned for allegedly manipulating interest rates such as Libor, the London interbank lending rate, a benchmark that is used to price trillions of dollars worth of products such as derivatives and mortgages worldwide.
Brokers such as ICAP, which match buyers and sellers of bonds, currencies and swaps, have faced allegations that their employees actively colluded with traders seeking to fix rates for personal gain - and were handsomely rewarded.
Banks and brokers have fired, suspended or placed a number of employees on administrative leave in an effort to prove their houses are now clean - though Deutsche Bank has been forced to reinstate four traders after they won a wrongful dismissal case in Germany two weeks ago.
It remains unclear which ICAP-related staff will be charged. The company confirmed only that it had suspended one employee and placed three others on administrative leave months ago.
But, almost five years since the world's financial system buckled and taxpayers footed the bill for big bank bailouts, few banks or bankers have faced sanctions.
Three banks - Britain's Barclays and RBS and Switzerland's UBS - have paid around $2.6 billion to date to secure civil settlements for rate rigging with UK and U.S. regulators. Britain's Serious Fraud Office (SFO) has leveled criminal charges at three relatively low-level individuals and U.S. prosecutors have charged two.
Both have charged Briton Tom Hayes, a former UBS and Citigroup trader, who once complained in a text message to the Wall Street Journal: "This goes much higher than me."
The cash-strapped SFO has said it hopes to charge more individuals over Libor rate rigging this autumn as it tries to reassure critics it will not hesitate to pursue senior industry figures or even institutions.
But it only began investigating the Libor scandal some two years after the Department of Justice, and in its efforts to make its mark on the inquiry ruffled U.S. feathers by arresting Hayes last year days before U.S. charges were announced, insiders say.
(Reporting by Kirstin Ridley, additional reporting by Clare Hutchison; Editing by Will Waterman)