In the Matter of: 

UNITED STATES OF AMERICA 

Before the 

COMMODITY FUTURES TRADING COMMISSION 

ICAP Europe Limited, 

) 

) 

) 

Respondent. 

) CFTC Docket No. 13-38 

) 

) 

) 

-------------) 

ORDER INSTITUTING PROCEEDINGS PURSUANT TO 

SECTIONS 6(c) AND 6(d) OF THE COMMODITY EXCHANGE ACT 

MAKING FINDINGS AND IMPOSING REMEDIAL SANCTIONS 

I. 

The Commodity Futures Trading Commission (the "Commission" or the "CFTC") has 

reason to believe that ICAP Europe Limited ("Respondent" or "ICAP"), a subsidiary of ICAP 

plc, has violated Sections 6(c), 6(d) and 9(a)(2) ofthe Commodity Exchange Act (the "Act" or 

the "CEA"), 7 U.S.C. §§ 9, 13b and 13(a)(2) (2006). Therefore, the Commission deems it 

appropriate and in the public interest that public administrative proceedings be, and hereby are, 

instituted to determine whether Respondent engaged in the violations set f01ih herein, and to 

determine whether any order shall be issued imposing remedial sanctions. 

II. 

In anticipation of the institution of an administrative proceeding, Respondent has 

submitted an Offer of Settlement ("Offer"), which the Commission has determined to accept. 

Without admitting or denying the findings or conclusions herein, except to the extent Respondent 

admits those findings in any related action against ICAP by, or any agreement with, the 

Department of Justice or any other governmental agency or office, Respondent herein consents 

to the entry and acknowledges service of this Order Instituting Proceedings Pursuant to Sections 

6( c) and 6( d) of the Commodity Exchange Act Making Findings and Imposing Remedial 

Sanctions ("Order"). 1 

Respondent consents to the entry ofthis Order and to the use of these findings in this proceeding and 

in any other proceeding brought by the Commission or to which the Commission is a party; provided, 

however, that Respondent does not consent to the use of the Offer, or the findings or conclusions in this 

Order, as the sole basis for any other proceeding brought by the Commission, other than in a proceeding 

in bankruptcy or to enforce the terms of this Order or where Respondent has admitted findings as set forth 

above. Nor does Respondent consent to the use of the Offer or this Order, or the findings or conclusions 

in this Order consented to in the Offer, by any other patiy in any other proceeding. 
III. 

The Commission finds the following: 

A. Summary 

The Yen London Interbank Offered Rate ("Yen LIB OR"), the benchmark rate at issue in 

this Order, is one of the most important financial benchmark interest rates used around the world. 

Yen LIB OR is established every day based on information submitted by banks who are members 

of the Yen LIB OR Panel. Three panel banks have been found to have undermined the integrity 

and reliability ofLIBOR and other benchmark rates through the manipulative acts of their 

employees. As set forth below, money market and derivatives traders at the banks were not the 

only wrongdoers with respect to LIBOR. The Yen interdealer brokers ofRespondent ICAPpurported honest middlemen between banks- participated as well. 

For more than four years, from at least October 2006 through at least January 2011 

("relevant period"), ICAP brokers on the Yen derivatives and cash desks knowingly 

disseminated false and misleading information concerning Yen borrowing rates to market 

participants in attempts to manipulate, at times successfully, the official fixing of the daily Yen 

LIBOR. ICAP brokers, including one known as "Lord LIBOR," engaged in this misconduct 

primarily to aid and abet a highly valued client, who was a senior Yen derivatives trader ("Senior 

Yen Trader") employed at UBS Securities Japan Co., Ltd. ("UBS") and later at another bank, in 

his relentless attempts to manipulate Yen LIB OR to benefit his derivatives trading positions that 

were tied to this benchmark. 2 

The rates contributed by the panel banks for Yen LIBOR are supposed to reflect each 

bank's assessment of the costs of borrowing unsecured funds in the London interbank market. 

Before panel banks make their rate submissions each day, ce1iain interdealer brokers, such as 

ICAP, which intermediate over-the-counter ("OTC") cash and LIBOR-based derivatives 

transactions between banks and other institutions, provide banks with their trading insight on 

cash pricing trends in the market and on assessments of likely LIB OR rates. Brokers provide 

this type of market information as a service to clients to solicit and maintain business, and are 

thus well-situated to influence the fixing of Yen LIB OR. During the financial crisis of late 2007 

through 2009 ("2007-2009 financial crisis"), panel banks became increasingly reliant on such 

market information from ICAP brokers and others to inform their LIBOR submissions. 

Accordingly, ICAP brokers' market views could and did have a significant impact on Yen 

LIBOR submissions. 

On December 19, 2012, the Commission issued an Order Instituting Proceedings Pursuant to Sections 

6(c) and 6(d) ofthe Commodity Exchange Act Making Findings and Imposing Remedial Sanctions 

against UBS AG and UBS, finding, among other things, that UBS AG and UBS, through the Senior Yen 

Trader, attempted to manipulate Yen LIBOR, at times successfully, through multiple methods. The 

Commission's Order against UBS AG and UBS found that one of the Senior Yen Trader's strategies 

included enlisting the aid of interdealer brokers to attempt to influence the rates submitted by Yen LIBOR 

submitters at other panel banks. In that Order, ICAP was identified as Brokerage A and the ICAP 

brokers referenced were identified as Brokerage A Yen Manager, Derivatives Broker A I and Cash Broker 

A. See http://www.cftc. gov/PressRoom/PressReleases/pr64 72-12. · 

2 
The Senior Yen Trader sought to capitalize on !CAP's extensive network of contacts at 

the Yen LIB OR panel banks to achieve his manipulative goals. Because the Senior Yen Trader 

was a significant client of the ICAP Yen derivatives desk, and to ensure that the desk kept and 

increased its share of his business, including the commissions and bonuses he generated for 

I CAP, the I CAP Yen brokers readily acquiesced to his repeated demands for assistance in 

manipulating Yen LIBOR. 

Over the years the Senior Yen Trader made more than 400 manipulative requests of 

certain ICAP brokers, which they often accommodated. Those ICAP Yen brokers used two 

means to disseminate false Yen LIBOR information and influence Yen LIBOR submitters. First, 

one ICAP "cash" broker provided daily market information concerning Yen LIBOR borrowing 

rates via group emails and oral communications to market participants, including Yen LIBOR 

submitters. The group emails were called "Run Thrus" and included "Suggested LIBORs" for 

certain Yen LIB OR tenors. Market participants believed that the Suggested LIBORs reflected 

the cash broker's assessment ofhow Yen LIBOR would be fixed based on his unbiased 

evaluation of borrowing costs in the interbank market. Almost all of the panel banks' Yen 

LIBOR submitters received the cash broker's Run Thru emails, and several relied on them in 

making their own rate submissions. However, during the relevant period, ICAP's Yen cash 

broker often skewed his Suggested LIBORs to benefit the Senior Yen Trader, rather than provide 

an objective, unbiased assessment of this benchmark interest rate. The brokers attempted to 

exploit the bank submitters' reliance, even sometimes referring to submitters as "sheep" blindly 

adopting the Suggested LIBORs as their own submissions. Second, at times, ce1iain ICAP Yen 

brokers targeted particular submitters or traders at panel banks and provided them false LIBOR 

information individually under the guise of true market information. 

!CAP's Yen derivatives desk maintained !CAP's direct relationship with the Senior Yen 

Trader. They and the Senior Yen Trader ensured the ICAP cash broker's unlawful assistance by 

providing various financial incentives, but the cash broker grew increasingly demanding. At one 

point, the ICAP Yen cash broker threatened the head of the Yen derivatives desk- "no more mr 

libor"- if he was not well-compensated for his services. As the cash broker's demands grew, 

the "kick backs" (as the head of the Yen derivatives desk called it) paid to the cash broker for 

"LIBOR services" quickly escalated from free meals and champagne, to commissions specially 

generated by the Senior Yen Trader, to a qumierly payment of $9,000 (ultimately totaling 

$72,000). 

Separate from the unlawful activity to help the Senior Yen Trader, on a limited number of 

occasions, the ICAP Yen brokers aided and abetted other derivatives traders' attempts to 

manipulate Yen LIB OR, for the same reasons that motivated them to help the Senior Yen Trader. 

!CAP's ineffectual supervision ofthe Yen derivatives and cash desks, its misplaced 

reliance on the expectation that Yen desk heads would enforce a compliance regime on their 

desk colleagues, and its failure to audit the Yen derivatives desk or adequately review the Yen 

brokers' communications with clients, among other internal controls and supervisory 

deficiencies, allowed this misconduct to continue for years. 

3 
*************** 

In accepting ICAP's Offer, the Commission recognizes Respondent's cooperation during 

the Division of Enforcement's investigation of this matter. 

B. Respondent 

ICAP Europe Limited ("ICAP") is a wholly owned subsidiary of ICAP Group Holdings 

plc ("ICAP Group"), a wholly owned subsidiary of ICAP plc, and is headqumiered in London, 

England. It manages some ofiCAP Group's brokering business in Europe, including the 

brokering business conducted by Yen brokers and other brokers engaged in the unlawful conduct 

found herein. Neither ICAP nor ICAP Group is registered with the Commission in any capacity. 

C. Facts 

1. LIBOR and the Fixing of LIBOR 

LIBOR is the most widely used benchmark interest rate in the world and affects market 

participants and consumers throughout the world, including in the United States. LIBOR is used 

as a barometer to measure strain in money markets and is often a gauge of the market's 

expectation of future central bank interest rates. LIBOR is used in interest rate transactions with 

a notional value of $500 trillion, such as OTC swaps, loans and exchange-traded interest rate 

futures and options contracts. 

During the relevant period, under the auspices of the British Bankers' Association 

("BBA"),3 LIBORs were issued on a daily basis for ten currencies, including Yen, with fifteen 

tenors (i.e., durations for interest rates) ranging from overnight through twelve months. Certain 

currencies, including Yen, are more widely referenced in interest rate contracts. One, three and 

six months are the most common tenors referenced in LIBOR-indexed transactions. 

According to the BBA, LIBOR "is based on offered inter-bank deposit rates contributed 

in accordance with the Instructions to BBA LIBOR Contributor banks." The BBA requires that: 

[a]n individual BBA LIBOR Contributor Panel Bank will contribute the rate at 

which it could bmTow funds, were it to do so by asking for and then accepting 

inter-bank offers in reasonable market size just prior to [11 :00 a.m. London 

time].4 

On July 9, 2013, NYSE Euronext Rate Administration Limited announced that it had been appointed 

as the new administrator for LIB OR. The transfer of the administration from BBA LIB OR Ltd, the 

subsidiary of the BBA, is expected to be completed in early 2014, once the Financial Conduct Authority's 

("FCA") authorization ofNYSE Euronext Rate Administration Limited is complete. 

4 This definition ofLIBOR has been used by the BBA from 1998 to the present. 

4 
Every business day shortly before 11:00 a.m. London time, the banks on the LIB OR 

panels submit their rates to Thomson Reuters. A trimmed averaging process is used to exclude 

the top and bottom quartile of rates and the remaining rates are averaged for each tenor. That 

average rate becomes the official BBA daily LIB OR (the "LIBOR fixing"). 

The BBA makes public the daily LIBOR fixing for each currency and tenor, as well as 

the daily submissions of each panel bank, through Thomson Reuters and the other data vendors 

licensed by the BBA. This information is made available and relied upon by market participants 

and others throughout the world, including in the United States. 

By its definition, LIB OR requires that the submitting panel banks exercise their judgment 

to determine the rates at which they may obtain unsecured funds in the London interbank market. 

These definitions require that submissions relate to funding and do not permit consideration of 

factors unrelated to the costs of borrowing unsecured funds, such as the benefit to a banlc' s 

derivatives or money market trading positions.5 

2. ICAP's Role as an lnterdealer Broker 

a. ICAP Intermediates OTC Derivatives and Cash Transactions 

Because of their role in the financial markets, interdealer brokers, including ICAP, have a 

significant impact on panel banks' views of the interbanlc markets for cash deposits, and 

therefore have a potential impact on panel banks' LIBOR submissions. Interdealer brokers, also 

known as voice and electronic brokers, act as intermediaries between major dealers in the money 

markets and the OTC derivatives markets to facilitate execution of interdealer trades. Interdealer 

brokers assist banks in obtaining funding by facilitating the negotiation of deposits and loans, 

and in hedging those transactions with derivatives trades often referenced to LIB OR. Brokers 

match buyers and sellers in return for commissions, and provide market information for banlcs. 

Typically, broker commissions are based on a percentage of the notional value of consummated 

transactions. Therefore, higher commissions are generated from brokering larger trades. 

In order to find matching counterparties, brokers provide bid or offer prices for a 

financial transaction. Brokers use "squawk boxes" or speakerphones which allow them to speak 

to numerous trading desks of their banlc clients and simultaneously to disseminate broadly bid 

and offer prices. ·Brokers also frequently use Bloomberg instant message chats and other 

messaging platforms, email and dedicated telephone lines. 

In June 2008, the BBA clarified that panel banks could not contribute a rate based on the pricing of 

any derivative financial instrument. BBA guidelines issued in October 2009 fmiher clarified that LIDOR 

submitters "should not ask intermediaries where they believe LIDOR rates will set on a given day and use 

this as a basis for submissions. This misses the point of the benchmark, and is a circular process that 

would rapidly lead to inaccurate rates." 

5 
b. ICAP Organization 

ICAP employs cash brokers, who intermediate cash trades in the money markets, and 

derivatives brokers, who intermediate derivatives transactions. ICAP organizes its brokers on 

desks by currency and by product, which means that for certain currencies, the cash brokers and 

the derivatives brokers sit on different desks. The desk primarily involved in the unlawful 

conduct found herein was the Yen derivatives desk ("Yen Desk") which was comprised of as 

many as seven brokers including the head ofthe desk ("Yen Desk Head"). Senior Yen Trader 

was a client of the most senior Yen broker on the desk, "Derivatives Broker 1." Senior Yen 

Trader also worked with another senior Yen broker on the desk ("Derivatives Broker 2") when 

Derivatives Broker 1 was out ofthe office. Derivatives Broker 1 and the Yen Desk Head were 

the brokers principally involved in the false reporting of Yen LIB OR market information and the 

attempts to manipulate the Yen LIB OR fixings. However, the entire Yen Desk, including 

another longtime Yen broker ("Derivatives Broker 3 ") and a newly-arrived junior broker 

("Junior Broker 1 "), was also involved and aware of the conduct. Certain of the Yen derivatives 

brokers received a portion ofthe Yen Desk's net revenue as a bonus. 

The Euro Yen Cash Desk ("Cash Desk") facilitated cash transactions in several 

currencies, with individual brokers on the desk specializing in particular currencies. One broker 

on the desk focused on both Euro- and Yen-based transactions ("Cash Broker 1 "). Cash Broker 

1 was !CAP's sole Yen cash broker and was the cash broker who knowingly disseminated false 

market information concerning Yen LIBOR. At times, when Cash Broker 1 was out ofthe 

office, ICAP Yen derivatives brokers used a Euro cash broker ("Cash Broker 2"), who did not 

broker Yen transactions, to disseminate the false market information. 6 

c. ICAP's "Market Color" Services Include "Suggested LIBORs" 

In addition to brokering transactions, as part of their client services, interdealer brokers, 

including ICAP, frequently provide clients with their views and advice on market pricing and 

trends, often called "market color." Clients, including LIBOR submitters and interest rate 

derivatives traders at panel banks, rely on brokers for such information. Because brokers speak 

to multiple clients at different financial institutions and share internally the information learned 

from clients, they have particular market insight about cash market prices and trends in otherwise 

opaque markets, offering an important price discovery function. In providing this market 

information, interdealer brokers are implicitly representing that such market information reflects 

their third-party unbiased assessment of borrowing costs and market pricing based on objective, 

observable data, some of which they uniquely possessed. 

During the relevant period, certain interdealer brokers, including ICAP brokers, provided, 

and still provide, predictions or suggestions of where they believe key benchmark interest rates, 

such as LIBOR, would fix on specific days. Interdealer brokers, including ICAP brokers, also at 

times shared with some panel banks the intended LIBOR submissions of other panel banks. 

6 Another ICAP broker sitting on another desk, who used to work with the Senior Yen Trader at 

another bank, also facilitated the Senior Yen Trader's attempts to manipulate Yen LIB OR on a few 

occasions. See infra, Section III.C.3.h. 

6 
During the relevant period, a number of ICAP brokers and brokers at other brokering 

firms circulated via email or by telephone each morning daily Run Thrus of the rates they 

expected to be published for LIBOR in various currencies and tenors, as well as other pricing 

information. Cash Broker 1 routinely disseminated his Yen Run Tln·us every morning at 

approximately 7:00a.m. London time, well before the BBA's 11:00 a.m. Yen LIBOR 

submission deadline. The. Run Thrus contained the following information: (1) a column stating 

where rates (prices) in basis points for Yen cash trades, for all tenors, were observed the previous 

trading day, broken down by Japanese and non-Japanese financial institutions; (2) a column 

stating the spread of rates for Yen cash trades for all tenors that were observed as of the market 

opening in London and late afternoon Tokyo, broken down by Japanese and non-Japanese 

financial institutions; and (3) a column titled "Suggested LIBORs," which contained Cash 

Broker 1 's suggestions as to where the published Yen LIB OR fixing for each tenor between one 

month and one year would set that day. 7 The following is an example of Cash Broker 1 's Run 

Thru email, from January 2, 2007: 

0110212007 07:05 

From: [Cash Broker 1] 

Sent: Tuesday, January 2, 2007 7:06AM 

Subject: yen nmthro2.xls2/l 

GOOD MORNING YEN RUN THRU 

TODAY YESTERDAY 

Japanese Japanese 

TIN 35 33 TIN 

SIN 35 33 SIN 

!Wk 36 34 !Wk 

2Wk 37 35 2Wk 

3Wk 42 39 3Wk 

ltn 47 45 ltn 

2m 56 53 2m 

3m 59 56 3m 

4m 61 58 4m 

5m 63 60 5m 

6m 66 63 6m 

9m 72 69 9m 

lyr 78 75 lyr 

SUGGESTED LIBORS 

46 43 1M 

4035 2M 

37 35 3M 

37 35 4M 

42 39 5M 

47 45 6M 

53 50 9M 

57 54 lYR 

59 56 

62 59 

64 61 

69 66 

76 73 

Non Japanese Non Japanese 

TIN 34 32 TIN 46 45 

SIN 34 32 SIN 42 48 

1Wk 35 33 1Wk 38 35 

2Wk 38 35 2Wk 38 35 

3WK 42 38 3Wk 42 38 

lm 46 43 lm 47 44 

2m 53 50 2m 52 49 

3m 56 53 3m 56 53 

4111 58 55 4m 58 55 

5m 60 57 5m 60 57 

6m 63 60 6m 62 59 

9m 69 66 9m 67 64 

1yr 75 72 1yr 75 72 

cd no trades cd no trades 

oln exp .26 olnite exp .26 

1am3 745 735 1am3 7325 7275 

lam6 755 745 1am6 74 73 

2yr 93625 92625 2yr 955 95 

CHEERS [Cash Broker 1] 

0.47375 

0.535 

0.5675 

0.59125 

0.61 

0.63 

0.695 

0.7525 

Cash Broker 1 began providing the cash pricing information through his daily Run Thru emails 

several years before the start of the relevant period in 2006. He added the "Suggested LIBORs" column 

in April2005. 

7 
As early as March 2006, ICAP brokers lmew that banks were relying heavily on ICAP 

brokers for LIBOR suggestions and other market information due to volatile market conditions, 

and that such market information had monetary value to ICAP. In an email, !CAP's Yen Desk 

Head commented to his supervisor: 

The market at the moment is so volatile that banks are becoming 

dependant [sic ]

8 

on ICAP for libor calls and swap/spread prices . 

. . . It is getting to the point when I will be quite happy refusing 

banks a service or a nod on libors if they do not suppoti us or ask 

for an umeasonable brokerage agreement. The yen is getting so 

volatile that banks are not sure where swaps should be so in such a 

market place e we should not be getting bunched up with yen in 

Tokyo or the other big currencies. 

During the 2007-2009 financial crisis, LIBOR submitters became increasingly reliant on 

interdealer brokers for their market information, including specific information about the level at 

which other panel banks intended to submit LIBORs, and the brokers' suggested LIBORs. This 

reliance was due to limited interbank lending occurring upon which submitters could base their 

LIBOR submissions. Some panel banks believed at times during the financial crisis that such 

market information provided by ICAP and other interdealer brokers was possibly the only 

meaningful market information available to assess their ability to borrow funds in the interbank 

markets. 9 

3. ICAP Brol<.ers Disseminated False and Misleading Suggested LIBORs in an 

Effort to Manipulate Yen LIBOR to Benefit Panel Banks, at Times 

Successfully 

Throughout the relevant period, certain ICAP Yen derivatives and cash brokers, acting 

together, lmowingly disseminated false and misleading suggested Yen LIBORs, in attempts to 

influence the Yen LIB OR submissions made by Yen LIB OR panel banks and thereby manipulate 

the official fixing of Yen LIB OR. These ICAP Yen brokers engaged in such false reporting 

primarily to assist the Senior Yen Trader at UBS (and later at another banlc) in his nearly 

constant efforts to manipulate Yen LIB OR to benefit his Yen derivatives trading positions that 

were valued based on the Yen LIB OR fixings. The Senior Yen Trader and the ICAP Yen 

derivatives and cash brokers believed that Cash Broker 1 could influence many of the Yen panel 

banks' submissions to levels favorable to the Senior Yen Trader's positions, and thereby affect 

the direction and level Yen LIB OR would fix at various tenors to benefit the Senior Yen Trader's 

positions. By beneficially affecting the Yen LIB OR fixings, the Senior Yen Trader could 

increase his profits or reduce his losses on his trading positions. At times, the collective effmis 

The communications quoted in this Order are from emails, instant messages, and the like. Some 

contain shorthand trader language and typographical errors. The shorthand and errors are explained in 

brackets within the quotations only when necessary to understand the discussion. 

9 Yen LIB OR submitters' reliance on interdealer brokers for market information was not consistent 

with BBA guidelines. See supra note 5. 

8 
of relevant ICAP Yen brokers and the Senior Yen Trader were successful in influencing Yen 

LIBOR submissions made by the panel banks, and thereby manipulating Yen LIBOR. 

The Senior Yen Trader made over 400 oral and written requests of certain ICAP brokers 

to assist with his manipulative scheme for Yen LIB OR, with each request covering multiple 

tenors, typically one, three and six months. These ICAP Yen derivatives and cash brokers often 

accommodated his requests. Their assistance to the Senior Yen Trader primarily consisted of 

two forms: (1) dissemination of false and misleading Suggested Yen LIBORs skewed to benefit 

the Senior Yen Trader's derivatives trading positions through Cash Broker 1 's Run Thru em ails 

provided to most of the Yen LIB OR submitters at panel banks; and (2) at times personally 

speaking with Yen derivatives traders or LIBOR submitters at panel banks to try to influence 

them to submit rates that they secretly knew would be beneficial to the Senior Yen Trader. 

After the Senior Yen Trader was no longer employed by UBS, certain ICAP Yen brokers 

offered these same services, which the brokers knew to be corrupt, to at least one UBS 

derivatives trader who was managing positions left by the Senior Yen Trader and also to at least 

one derivatives trader at another panel banlc in an effort to obtain new business. 

a. ICAP Brokers Provided Unlawful Assistance to Senior Yen Trader from 

the Outset 

In the fall of2006, shortly after the Senior Yen Trader joined UBS, he became a client of 

Derivatives Broker 1. The Senior Yen Trader, based in Tokyo, was then a relative newcomer to 

the Yen market but quickly became known as a high volume, aggressive and dominant Yen 

derivatives trader who was injecting significant liquidity into a previously illiquid market. 

Because he commanded a large trading volume, the Senior Yen Trader was a highly desirable 

and sought after client of interdealer brokers. 

To ensure he received significant business from the Senior Yen Trader, Derivatives 

Broker 1, based at that time in London, agreed to work overnight to better serve the Senior Yen 

Trader during Tokyo business hours and became the primary contact for the Senior Yen Trader 

at ICAP. (Tokyo is eight hours ahead of London.) As a result, Derivatives Broker 1 gave up his 

other London-based clients, and by early 2007 relied almost exclusively on the Senior Yen 

Trader for his business and resulting commissions. 

From the outset of his client relationship with the Senior Yen Trader and to keep the 

Senior Yen Trader's business, Derivatives Broker 1 routinely and aggressively assisted him in 

efforts to manipulate Yen LIB OR. When Derivatives Broker 1 was out of the office, other Yen 

derivatives brokers on the Yen Desk, primarily Derivatives Broker 2 or the Yen Desk Head, 

coordinated with the Senior Yen Trader on his requests to manipulate; at times other brokers on 

the Yen Desk helped him as well. 

9 
i. ICAP Cash Broker l's Suggested LIBORs Sent to Yen LIBOR 

Panel Banks Were Skewed to Benefit the Senior Yen Trader 

To accomplish the Senior Yen Trader's manipulative goals, Derivatives Broker 1 needed 

and obtained the critical assistance of Cash Broker 1. Cash Broker 1 had long-standing 

relationships and daily contact with many of the Yen panel bank submitters. He often discussed 

with submitters what their intended LIBOR submissions would be and what other panel banks 

might submit. Cash Broker 1 also issued the daily Suggested LIBORs as part of his Run Thrus 

upon which Yen LIB OR submitters relied in whole or in pmi at times to make their Yen LIB OR 

submissions. 

As early as October 2006, Derivatives Broker 1, acting on behalf of the Senior Yen 

Trader, began asking Cash Broker 1 to skew his Suggested LIBORs that he provided in the Run 

Thru emails or in calls to traders or submitters to reflect the rates or levels desired by the Senior 

Yen Trader. Cash Broker 1 knew from the outset that such requests were for the Senior Yen 

Trader. At times, the Senior Yen Trader reached out to Cash Broker 1 directly, such as on 

March 23,2007: "hi [Cash Broker 1] know [Derivatives Broker 1] is away and this may seem 

strange given my recent requests but really need a high/unchanged 1m libor today, low for 

everything else. thanks as always [Senior Yen Trader]." 

Cash Broker 1 's skewed Suggested LIBORs sent to Yen LIBOR submitters as pmi of his 

daily Run Tlnus was the primary and most effective method by which cetiain ICAP brokers 

assisted the Senior Yen Trader in his efforts to manipulate the daily Yen LIB OR fixings. Cash 

Broker 1 's Run Thrus were widely circulated among and valued by Yen market participants at 

the panel banks and elsewhere. More than 100 cash and derivatives traders received Cash 

Broker 1 's Run Thru em ails, including traders from nearly all of the Yen LIB OR panel banks 

and, at different times, submitters from at least eleven of the sixteen Yen LIBO R panel banks. 

Many, if not all of the recipients of the Run Thrus, asked to receive the em ails. Cash Broker 1 

sent skewed Suggested LIBORs even to Bank of England staff. 

ICAP Yen brokers, the Senior Yen Trader and others believed that Cash Broker 1 's 

Suggested LIBORs directly influenced the Yen LIB OR submissions by panel banks. At least 

several panel banks considered the Run Thrus when making their Yen LIB OR submissions, and 

at times, some banks simply submitted the very rates suggested by Cash Broker 1. Throughout 

the relevant period, the Yen LIB OR submissions of cetiain panel banks overwhelmingly 

mirrored the Suggested LIBORs of Cash Broker 1. For example, Bank A submitted one-month, 

three-month, and six-month Yen LIBORs that were identical to Cash Broker 1 's LIBOR 

suggestions on 90 percent of the submission dates in 2007, and 80 percent of the submission 

dates in 2008. Similarly, Bank B submitted one-month, three-month, and six-month Yen 

LIBORs that were identical to Cash Broker 1 's LIBOR suggestions on 80 percent of the 

submission dates in 2008, and 70 percent of the submission dates in 2009. 

Even submitters at panel banks that tried to make benchmark interest rate submissions 

that reflected an assessment ofthe costs ofborrowing funds in the interbank Yen market may 

have passed on false or misleading submissions because they used ICAP brokers' purported 

unbiased assessments of Yen borrowing rates and Suggested LIBORs to inform their 

10 
submissions. Their reliance on ICAP brokers meant that their submissions did not actually 

reflect borrowing costs, but rather the Senior Yen Trader's desired rates. The ICAP brokers 

believed that the wide dissemination of and reliance on the Suggested LIBORs would increase 

the chances that they would at times be successful in manipulating Yen LIB OR submissions, and 

thereby Yen LIB OR, for the Senior Yen Trader and others. This was the "libor service" (as 

coined by the brokers involved) they provided to the Senior Yen Trader. 

ICAP Yen brokers gloated over their influence on the Yen market and the Yen LIB OR 

fixings. They referred to panel banks as "copying" the Cash Broker's Suggested LIBORs, and 

called them "sheep" because they followed wherever the Cash Broker led them ("[Cash 

Broker 1] sending out higher than he thinks so hopefuly the sheep will just copy"). Cash 

Broker 1 believed and boasted that a number ofbanks were copying his Yen LIBOR 

recommendations. Cash Broker 1 referred to himself and was called by others by such monikers 

as "Mr. LIBOR," "Lord LIBOR," "Lord Bailiff' and "M'Lord." At least Derivatives Broker 1 

also believed Cash Broker 1 was successful in "moving the market" on a number of occasions. 

Derivatives Broker 1 sold this success to the Senior Yen Trader, noting at various times as 

follows: 

• "[Cash Broker 1] has been doing a number on some of the 

contributors because a couple of them were edging their libm·s 

slightly lower yesterday before he intervened;" 

• "morning mate ... seems [Cash Broker 1's] cover does have 

some influence, people actually took notice of his 87 libor! will 

be back on his case again today;" 

• "i hope that 6m lib or has got me back in your good books! ! 

used all my powers of persuasion on that one;-) ... think [Bank 

A and Bank B] must have looked at [Cash Broker A's] first 

suggestion .... they both moved up 11 bps to 1.1 0;" and 

• "you have a really big fix tonight i believe? if [Cash Broker 1] 

sends out 6m at a more realistic level than 1.1 0 i reckon [Bank 

A and Bank B] will parrot him, it might mean 6m coming 

down a bit." 

Communications between the ICAP Yen brokers and the Senior Yen Trader and among 

the ICAP brokers, examples of which are set forth below, reflect the ICAP brokers' willingness 

and significant effmis to help the Senior Yen Trader. The communications also reflect the ICAP 

brokers' and the Senior Yen Trader's beliefthat they had an impact on the Yen LIBOR fixings, 

that Cash Broker 1 's suggested rates did not always reflect his true and objective assessment of 

where Yen LIB OR would fix, but were designed to help the Senior Yen Trader, and that the 

Senior Yen Trader highly valued the ICAP brokers' special LIBOR services and was willing to 

pay for them, with gratuities like a curry meal or champagne or additional commissiongenerating trades, or bonuses as the relationship developed over time. 

11 
October 23, 2006: 

Derivatives Broker 1: Morning Lad [Cash Broker 1 ], On the scrounge again, if 

possible keep 3m the same and get 6mos as high as you 

can. My guy has an enormous fix on Wednesday in 6mos 

and will want it as high as possible. Waiting for my credit 

card to get returned to me from a drunken night out 

bowling, but will be supplying you with copious amounts 

of curry on it's imminent return. Cheers 

October 24, 2006 (emphasis supplied): 

Derivatives Broker 1: let me lmow a little later what you need ... i know u want 

6's high tomorrow 

Senior Yen Trader: well today and tomorrow then i can breath a little! 

2morrow fix is huge 400b 

Derivatives Broker 1: i lmow you told me ... ok as long as the futs don't get 

outdone by any libor moves south? 

Senior Yen Trader: ... libors going up saved me one day looked like i was 

going to lose 50m jpy on futs vs libs 

Derivatives Broker 1: ouch! 

Senior Yen Trader: but then 6m went up a bp and i was saved well almost 

Derivatives Broker 1: a50 curry was cheap then :-D 

Senior Yen Trader: yes mate seriously whatever it takes bill me! 

October 24, 2006 (emphasis supplied): 

Derivatives Broker 1: Realise it might be getting harder but need 6m kept as high 

as possible .... tomorrow I have a massive fix, today just 

large!! Ta mate Get your curry order ready will send 

[Junior Broker 1] round tomorrow. 

Cash Broker 1: How high ..... above 552? 

Derivatives Broker 1: If you can get them up there and keep them there 

tomorrow reckon the trader from ubs Tokyo will come 

over and buy you a curry himself! 

October 25, 2006 (emphasis supplied): 

Cash Broker 1: Depending where it sets ldO [a restaurant] for lunch or 

cash would be preferable!! Out for curry tonite Mlord 

Derivatives Broker 1: K1 0 it is, will get [Junior Broker 1] on the case ... any 

chance of 55.25 in 6mos? 

Cash Broker 1: Really cant do much only dodgy ones where [Bank C] 

dealer on hols and [Bank B] trying to get changed. Who 

sets ubs libors 

Derivatives Broker 1: Don't lmow mate,I can get [Banlc A] to help but that's it 

12 
October 5, 2007 (emphasis supplied): 

1st email: 

Derivatives Broker 1: Happy Friday M'Lord, i am off Monday for the Tokyo 

holiday,could you please do your best to hold 3mos and 

6mos libors up as best you can for these next couple of 

days (i do appreciate the pressure is downwards, but it may 

be quiet ahead of the us no.s today and tokyuo holiday 

monday). Thanks again mate. [Derivatives Broker 1] 

Cash Broker 1: Me too off Monday ... Ill tell them to leave the same!! 

2nd email: 

Cash Broker 1 : 

But these are drifting down ....... 3m shud be really 

1.015 .... 6m 1.09 if not tad lower ....... Mlord libor 

Do my best to hold them up but really if I put them down 

myself you will get 1 pet libor 3m and 6mos 1.08. You 

will have to have a word with [Senior Yen Trader] warn 

him that they are looking softer. . . . I can hang it out so 

long 

December 7, 2007 (emphasis supplied): 

Derivatives Broker 1: Hi [Cash Broker 1], Thanks again for all your efforts, ... 

Can you do your best to drive these libors higher,especially 

3 mos if you can and it is still well bid .... UBS had to 

stagger their move up but will definitely be in the count 

today .... p.s Bubbly on its way with [Senior Yen 

Trader]. 

February 29, 2008 (via text message to personal mobile phone) (emphasis supplied): 

Derivatives Broker 1: Ifu can pls move 3m up more than 6m wud be much 

appreciated :-P 

Cash Broker 1: What happens if they go down. 3m looked higher 

yesterday pm and 6m no change 

Derivatives Broker 1: Make 6m go lower! They r going up. [Senior Yen 

Trader] will buy you a ferrari next yr if you move 3m 

up and no change 6m 

Cash Broker 1: Not bad isuppose 9625 against 01625 

September 25, 2008 (emphasis supplied): 

Senior Yen Trader: lm libor worries me i need it back under 70 

Derivatives Broker 1: [Cash Broker 1] is fully aware of the importance of 

Mondays libors, I'll call him again this evening before I 

13 
head off, but as he said last night (he called me at home) its 

like the Dutch guy standing with his finger in the hole of 

the dam. 

At times, to ensure the needs ofthe Senior Yen Trader were met, even after he distributed 

his Run Thru for the morning, Cash Broker 1 re-sent his daily Run Thru with revised Suggested 

LIBORs to better reflect the Senior Yen Trader's requests. For example, on September 4, 2007, 

before Cash Broker 1 had distributed a Run Thru, the Senior Yen Trader pressured Derivatives 

Broker 1 as follows: 

Senior Yen Trader: ... need 3m high v badly or at least unchanged have some 

big fixings whilst i am away 

Derivatives Broker 1: ... will be on [Cash Broker 1 's] case ... 

Senior Yen Trader: ... mate can we try to get 3m higher today 

Derivatives Broker 1: yes mate ... i will be doing all i can 

Derivatives Broker 1 then sent the following email to Cash Broker 1 bearing the subject line, 

"3mos libor going to the moon!": 

Derivatives Broker 1: Hi [Cash Broker 1 ], Can you please send 3 mos libor out 

higher please. Thanks 

Cash Broker 1: THESE LOOK WAY DOWN .... 3M SHUD BE 95 .... 

Derivatives Broker 1: Thanks [Cash Broker 1] ... $cash is firmer though? Try 

and send out 96 if you can please 

Cash Broker 1: OFF COURSE 

Cash Broker 1 then distributed his morning Run Thru email, in which his Suggested 

LIBORs stated that three-month LIBOR fixing would be 0.96 and six-month LIBOR fixing 

would be 1.05. At the same time, Derivatives Broker 1 communicated via Bloomberg chats with 

other derivatives brokers on the Yen Desk regarding the Senior Yen Trader's request, 

specifically asking the Yen Desk Head to apply additional pressure to Cash Broker 1 with 

respect to both his three-month and six-month LIBOR suggestions: 

Derivatives Broker 1: want libors up today ..... big fix in 3mos so that is most 

important . . . thanks 

Junior Broker 1: cheers [Derivatives Broker 1] 

Derivatives Broker 1: ... got [Cash Broker 1 's] libors thks 

Junior Broker 1: lib 1m-80, 3m- 96 and 6m- 05 is what he has sent out 

thinks 3m is 95 and 6m 06 fyg 

Derivatives Broker 1: ... try and get [Cash Broker 1] to send out a revised libor 

run with 3m and 6m higher please [Yen Desk Head] .... ta 

Yen Desk Head: will do 

Derivatives Broker 1: :-) is this cash looking bid?? 

Yen Desk Head: just fin din out on the back of his revised libors,sent at 

your request but he thinks it might be nearer 107 than 106 

14 
Since the original Run Thru apparently was not high enough to suit the Senior Yen 

Trader's demands, Cash Broker 1 distributed the following "Revised LIBORs" email, complying 

with Derivatives Broker 1 's request to move his LIBOR recommendations for three-month and 

six-month LIBOR fixing higher than the original Run Thru (three-month changed from 0.96 to 

0.98, and six-month changed from 1.05 to 1.08): 

From: [Cash Broker 1] 

Sent: Tuesday, September 4, 2007 9:27 AM 

Subject: 

REVISED LIBORS 

1M 0.8 

2M 0.86 

3M 0.98 

4M 1.02 

5M 1.05 

6M 1.08 

9M 1.12 

lYR 1.15 

ii. ICAP Yen Brokers Also Contacted Traders and Submitters at 

Panel Banks Directly Asking for Help on LIBORs to Further 

Senior Yen Trader's Manipulative Scheme 

Teaming with the Senior Yen Trader, Derivatives Broker 1 asked, or had his Yen Desk 

colleagues ask, individual panel banks directly to move their LIBOR submissions in a manner 

that the brokers knew would benefit the Senior Yen Trader. 

October 31, 2006 (emphasis supplied): 

1st message (emphasis supplied): 

Senior Yen Trader: hi do you spk to [Bank D] or [Bank C]? have their 6m 

libors very very low thx for getting it up y/day 

Derivatives Broker 1 : cash boys talk to [Banlc C] but their guy has been away 

,will chase them today no contact with [Bank D] cash 

Senior Yen Trader: ok they have probably just left the libors alone whilst he is 

away! 

Derivatives Broker 1: they will be wiped off the bottom anyway 

Senior Yen Trader: yes evry little helps 

Derivatives Broker 1: :-) 

2nd message: 

Derivatives Broker 1: Morning [Cash Broker 1], Still need these libors kept as 

high as possible please mate. . . . anything you can do to get 

them high will be much appreciated. Thanks 

15 
December 6, 2006: 

Derivatives Broker 1 (to Senior Yen Trader): i have spoken to [Bank A] about 

libors,he will be the lowest ... 

August 23, 2007 (emphasis supplied): 

Derivatives Broker 1: [Derivatives Broker 3] does [RBS 10 Yen LIB OR Back-Up 

Submitter] have any influence over their libor sets ... if he 

does ask him to do us a favour and edge 6m up 

please ..... think [BankE Yen Trader] was chasing [Cash 

Broker 1] for a high fix as well ,so should do us all a favour 

... thanks 

Derivatives Broker 3: [RBS Yen LIBOR Back-Up Submitter] is doing them this 

wek , he wants 6's up so will be marking them up anyway 

Derivatives Broker 1: brooliant!! they are malting fortunes with these high 

fixings!!! :-) thats UBS,RBS and [BankE]+ M'Lord 

should be old! 

Cash Broker 1 also communicated directly with traders and submitters he knew at the 

panel banks to try to influence their Yen LIBOR submissions. For example, Cash Broker 1 

contacted Bank F's Yen LIBOR submitter on multiple occasions, attempting to improperly 

influence Bank F's LIBOR submissions, after receiving instructions from Derivatives Broker 1 

on behalf of Senior Yen Trader. 

October 19, 2007 (emphasis supplied): 

Derivatives Broker 1: want 1m and 6m libors to keep pushing down ... 3m to 

hold as best we can (6m down the most important thing) .. 

. same goes for next week ,if you could just remind [Cash 

Broker 1] each morning 

Junior Broker 1: will do thks 

October 24, 2007: 

Cash Broker 1 : 

Bank F Yen Submitter: 

Cash Broker 1: 

Banlc F Yen Submitter: 

[Banlc F Yen LIBOR Submitter] where will u go 3m 

today? 

SORRY 0.93 

opps how about 90? 

NO DONT WANT LIBOR TOO LOW 

10 On February 6, 2013, the Commission issued an Order Instituting Proceedings Pursuant to Sections 

6( c) and 6( d) of the Commodity Exchange Act Making Findings and Imposing Remedial Sanctions 

against The Royal Bank of Scotland plc and RBS Securities Japan Ltd. (collectively "RBS"), finding, 

among other things, that RBS, through its Yen LIBOR submitters and other yen traders, attempted to 

manipulate Yen LIBOR, at times successfully, through multiple methods. In the Commission's Order, 

ICAP is identified as Interdealer Broker A. See http://www.cftc.gov/PressRoom/PressReleases/pr651 0-

_U. 

16 
March 31, 2009: 

1st email, with Senior Yen Trader's request: 

Senior Yen Trader: 1m must come lower japanese banks haven't moved their 

1m fix even though 1m tibor came down 

Derivatives Broker 2: will talk to [Cash Broker 1] again now. 

2nd email, from Cash Broker 1, passing along the request: 

Cash Broker 1: when u have time will u move yre 1 2 and 3m libor 

down? 

Banlc F Yen Submitter: no dont really want to start making libors to lower does 

not achieve much 

Cash Broker 1: ok thks [Bank F Yen LIB OR Submitter] 

b. Other Brokers on the Yen Desk Coordinated to Ensure the Senior Yen 

Trader's Demands Were Met 

In the spring of2007, Derivatives Broker 1 relocated from London to New Zealand, and 

was away from his duties for several months. In his absence, the Yen Desk Head and 

Derivatives Broker 2 took primary responsibility for brokering trades for the Senior Yen Trader 

and facilitating the Senior Yen Trader's continual unlawful requests. After Derivatives Broker 1 

re-assumed his duties in New Zealand, the Senior Yen Trader remained his only client. Due to 

the geographical and time zone separation, Derivatives Broker 1 required the assistance ofthe 

Yen Desk in London to communicate the Senior Yen Trader's requests to Cash Broker 1, and to 

ensure that Cash Broker 1 issued the skewed Suggested LIBORs in his daily Run Thru emails. 

The Yen Desk had daily internal coordination discussions via Bloomberg chats about the 

Senior Yen Trader's LIB OR needs. All of the brokers on the Yen Desk participated in these 

daily Bloomberg chats with Derivatives Broker 1. Generally, each day Derivatives Broker 1 

conveyed the Senior Yen Trader's "LIB OR needs." Various junior Yen derivatives brokers 

(including Junior Broker 1) were assigned to communicate the Senior Yen Trader's requests to 

Cash Broker 1. The junior brokers then typically informed Derivatives Broker 1 of the 

Suggested LIBORs that Cash Broker 1 intended to include in his daily Run Thru. If Derivatives 

Broker 1 was dissatisfied with the LIB OR numbers, he either: (1) asked the junior brokers to 

instruct Cash Broker 1 to move the LIB OR numbers up or down, consistent with the Senior Yen 

Trader's preferences; or (2) asked the Yen Desk Head to pressure Cash Broker 1 to move his 

LIBOR numbers if he felt Cash Broker 1 was not cooperating. Often simultaneously, 

Derivatives Broker 1 maintained close communication with the Senior Yen Trader to discuss the 

Senior Yen Trader's trading positions and LIB OR needs. 

The communications among the ICAP Yen brokers and with the Senior Yen Trader were 

open and detailed regarding their joint efforts to manipulate the Yen LIBOR fixings. The 

following are examples of such communications: 

17 
June 4, 2007 (emphasis supplied): 

Yen Desk Head: what does [Senior Yen Trader] want with libors? 

Derivatives Broker 1: ... KEEP lMTH AS LOW AS POSSIBLE PLEASE 

Yen Desk Head: no probs .•. marking lm down at 62 

Derivatives Broker 1: HE'LL SUCK YOUR OLD PELLA 

July 4, 2007 (emphasis supplied): 

July 13, 2007: 

Derivatives Broker 3: anything libors, 6's look lower being told 

Derivatives Broker 1: try and hold it please at 86 

Derivatives Broker 3: [Cash Brol{er 1] says his shoulders are aching holding 

them up!!! 

Derivatives Broker 1: he's a strong lad,i can smell him from here!! 

Junior Broker 1: libors matey> 

Derivatives Broker 1: hi 6mos(not down! !) .. high 3mos and low 1mos please 

Junior Broker 1: ok. ..... 

Derivatives Broker 1: when he tells you what he is sending out can you also ask 

him where he actually thinks they should be please ... many 

thenks 

Junior Broker 1: no grumbles 1m- 62.75, 3m- 77.5, 6m- 87.125, thinks 3m 

may be slightly lower, 77.375 and he reckons 6m is going 

to come 'at 86.75 

Derivatives Broker 1: thanks mate 

August 7, 2007 (emphasis supplied): 

Derivatives Broker 1: ... i want 1mos held as low as possible .. but would 

appreciate an honest opinion ... did you get what i said 

about libors? 

Junior Broker 1: yes lm- he has sent out 66, really though thinks more 

like 66.5, 3m-82.5 and 6m- 89.25 

Derivatives Broker 1: thanks [Junior Broker 1] much appreciated 

August 13, 2007 (emphasis supplied): 

Derivatives Broker 3: [Cash Broker 1] is in, anything libors? 

Derivatives Broker 1: high 6mos suits 

Yen Desk Head: 1m .80 3m .93 6m 1.03 

Derivatives Broker 1: thks 

Yen Desk Head: think he sent 6s out this high cause of [Senior Yen 

Trader] 

18 
September 10, 2007 (emphasis supplied): 

1st message (emphasis supplied): 

Derivatives Broker 1: looking for high 3m and 6m if we can help at all ... 

Yen Desk Head: ... the boy [Cash Broker 1] did good for [Senior Yen 

Trader] on friday in 3s 

Derivatives Broker 1: yeah unchanged was good ... i can't get these swaps into 

line today without raising libors 

Derivatives Broker 1: ... the week of 25th to 28th sep ... he will be chasing you 

for his fixings [Yen Desk Head] .. think once the imm has 

gone he will be looking for low libors! 

2nd message (emphasis supplied): 

Senior Yen Trader: once again thx libors 

Derivatives Broker 1: no problem just starting to worry about how i am going to 

push them lower next week!! 

Senior Yen Trader: no just leave em high need high at stati of oct 

Derivatives Broker 1: ok mate 

Senior Yen Trader: then we can make a push for lower fixes, 

Derivatives Broker 1: gotcha ... just give me a "wish list" at the start of each 

day and i will compose a beeging letter to [Cash Broker 

1] after lunch. 

Senior Yen Trader: ok thx mate one thing which i don't think you can do is 

push them one then the other way need to be consistent ie 

allllower every day or vice versa 

Derivatives Broker 1: no smalls maybe but you are better looking at the bigger 

picture and basing your requests on the macro outlook 

rather than the micro :-) 

January 10, 2009 (emphasis supplied): 

Derivatives Broker 1: [to Derivatives Broker 2] I hope [Senior Yen Trader] is 

not being too painful, he has had a storming start and is 

very happy with the libors [Cash Broker 1] and 

yourselves are managing to fudge for him (as long as he 

thinks you are trying!). 

19 
c. ICAP Brokers Reaped Commissions and Bonuses and Obtained Extra 

Payments from UBS as a Result of Their LIB OR Services for the Senior 

Yen Trader 

Several ICAP brokers were highly incentivized to facilitate the Senior Yen Trader's 

manipulative schemes. The Senior Yen Trader guaranteed the ICAP brokers' loyalty and 

cooperation with his manipulative schemes by ensuring that !CAP's Yen derivatives and cash 

brokers were well-compensated on several levels: 

First, UBS, and in particular the Senior Yen Trader, were significant clients of the ICAP 

Yen Desk. The Senior Yen Trader steered a considerable amount of business toward Derivatives 

Broker 1, resulting in substantial bonuses not only for Derivatives Broker 1, but also for several 

other brokers on the Yen Desk, including the Yen Desk Head, based on the amount of 

commissions his business generated for the Desk. Beginning in June 2007, UBS paid ICAP a 

monthly fixed fee that averaged between 70,000 GBP and 85,000 GBP per month (US$126,000 

and US$153,000) for brokerage services performed on behalf of the Senior Yen Trader. As a 

result, between April2007 and March 2009, the Senior Yen Trader singlehandedly accounted 

for, on average, approximately fomieen percent (14%) of the Yen Desk's business (although at 

times, he accounted for as much as twenty percent (20%) ofthe Yen Desk's business), making 

him the Yen Desk's biggest individual client. UBS was the Desk's overall largest client during 

the relevant period, accounting for, on average, approximately twenty-three percent (23%) of the 

Desk's revenue between April2007 and March 2009 (although at times, it accounted for as much 

as thiliy percent (30%) of the Desk's revenue). 

Second, during the relevant period, the Senior Yen Trader also provided considerable 

liquidity to the market and acted as the counterparty to many transactions facilitated by ce1iain 

ICAP brokers, thus fmiher increasing the commissions earned by the Desk. The Yen Desk 

earned a fixed fee from UBS, but also received commissions based on the notional value of the 

transactions from the counterparties to the Senior Yen Trader's trades. Because he brought 

significant business to the Yen Desk, losing the Senior Yen Trader's business would have been, 

as stated by one ICAP Yen broker, "a significant loss." 

Third, at the urging of the Senior Yen Trader, due to the quickly increasing demands of 

Cash Broker 1 for more substantial compensation, by as early as the summer of 2007 UBS 

agreed to increase its monthly fee by $9,000, at least partly in recognition of the "LIBOR 

services" or the "fixing service" offered to the Senior Yen Trader, which the Yen Desk Head 

provided to Cash Broker 1 quarterly as a bonus. 

ICAP Yen brokers and the Senior Yen Trader believed that Cash Broker 1 was very 

effective in disseminating false Yen LIBOR information through the provision ofthe skewed 

Suggested LIBORs and his direct contacts with Yen LIBOR submitters and traders at panel 

banks. Initially, as the Senior Yen Trader began making his requests in late 2006, Cash Broker 1 

agreed to skew his Suggested LIBORs for promises of, as noted supra, an occasional lunch or 

dinner, such as "copious amounts of curry," or "bubbly." Derivatives Broker 1 constantly used 

flattery to persuade the Cash Broker 1 to modify his LIB OR recommendations, referring to him 

in these emails as "Lord Libor," "M'Lord" and "Lord Bailiff." (In fact, as noted supra, Cash 

20 
Broker 1 referred to himself using the same monikers.) But, flattery was not enough. The 

Derivatives Broker 1, Yen Desk Head and the Senior Yen Trader also tried to appease him by 

giving him a trade with UBS on occasion to intermediate, for which he would earn a broker's 

commission. For example: 

January 25, 2007: 

Cash Broker 1: 

Yen Desk Head: 

Cash Broker 1 : 

February 22, 2007: 

I hear through the vine you have a good month. Hows my 

bonus pot looking? Mlord libor 

will push one your way today 

Ok chief .... thks And im pushing 6mos as low as I can!! 

Derivatives Broker 1 [to Cash Broker 1]: Can you get 1mos and 3 mos lower 

please ... UBS said he will try and do a deal with me to pay 

you! 

Cash Broker 1 's demand for greater compensation in return for his skewed Suggested 

LIBORs quickly escalated, and he threatened to stop providing the "LIBOR services," as the 

Senior Yen Trader's requests became more frequent and demanding of accommodation. As the 

examples below demonstrate, the Yen Desk Head matter-of-factly called Cash Broker 1 's 

demands as requests for "kick backs," and the Senior Yen Trader recognized that Cash Broker 1 

was making him "loads of money." 

April18, 2007 (emphasis supplied): 

Cash Broker 1: 

Yen Desk Head: 

April 19, 2007 (emphasis supplied): 

Cash Broker 1: 

Yen Desk Head: 

Hi [Yen Desk Head] with ubs how much does he appreciate 

the yen libor scoop? It seems to me that he has all his glory 

etc and u guys get his suppmi in other things. I get the drib 

and drabs. Life is tough enough over here without having 

to double guess the libors every morning and get zipperde-do-da. How about some form of performance bonus 

per quarter from your b bonus pool to me for the libor 

service ... 

Lord Baliff, I would suggest a lunch over golden 

week. Monday or Tuesday if you are around .... As for kick 

backs etc we can discuss that at lunch and I will speal{ 

to [Senior Yen Trader] about it next time he comes up 

for a chat. 

[Yen Desk Head] The UBS bro was that for me? Mlord 

No, ... his bro for your pad was 900 quid fyg 

21 
Cash Broker 1 : 

Yen Desk Head: 

[Inserts subject line "LIBORS NO MORE"] [Yen Desk 

Head] ... As far as I was concerned [Senior Yen Trader] 

was paying for the libor assist for my assistance. You have 

as far as I am concerned have charged him bra on the deal. 

Happy days for u. fyak all for me again!! ... 

[Cash Broker 1], I will have a lunch with you next week 

and have a chat about it.I have been thinking of ways of 

sorting you out.lf the needs be I will look into it on a 

bigger scale eg your salary package. 

June 7, 2007 (message sent to Derivatives Broker 1) (emphasis supplied): 

Yen Desk Head: [I need] to cover [Cash Broker 1] with future bonus 

payments that I had to promise him . . . if you could speak 

to [Senior Yen Trader] out of hours and hint that [Cash 

Broker 1] had said he would stop giving the 

libor"flows" then maybe [Senior Yen Trader] could 

push [his supervisor at UBS] to mal\:e the payment, 

[Senior Yen Trader] said if it were down to him it 

would be paid as [Cash Broker 1] makes him loads of 

money and i had to commit to paying lord baliff a 

regular bonus because basically while you were off he 

said it was all over and he would not help anymore if 

there was not enough money in it for him ... 

The Yen Desk Head and Derivatives Broker 1 pressed the Senior Yen Trader about 

paying Cash Broker 1 an additional bonus. The Senior Yen Trader readily agreed, and as a result 

ofthe Senior Yen Trader's efforts within UBS to get recognition for the "LIBOR services" that 

Cash Broker 1 provided to him, ICAP successfully re-negotiated its fixed fee contract with UBS 

in July 2007 to increase its monthly fixed fee by an additional 5,000 GBP (US$9,000). Cash 

Broker 1 received from the Yen Desk this amount as a quarterly bonus, and the Yen Desk 

retained the rest as additional bonuses and compensation for the Desk. 

Periodically, when the Yen LIB OR fixing did not move in the direction he requested, the 

Senior Yen Trader threatened to take UBS business from ICAP. In response, Derivatives Broker 

1 and Yen Desk Head urgently pressed Cash Broker 1 to modify his Suggested LIBORs. For 

example, on June 28, 2007, Cash Broker 1 was resisting sending a revised Suggested LIBOR 

reflecting the Senior Yen Trader's preferred six-month rate, after he had already distributed the 

day's Run Thru. Derivatives Broker 1 and Yen Desk Head had the following exchange 

(exclamation by all-capitalletters in original): 

Derivatives Broker 1: [Yen Desk Head] THIS IS GETTING SERIOUS [Senior 

Yen Trader] IS NOT HAPPY WITH THE WAY THINGS 

ARE PROGRESSING HE IS GOING TO HAVE A 

WORD WITH [Competing Broker] TO RECTIFY THE 

SITUATION. CAN YOU PLEASE GET HOLD OF [Cash 

22 
Yen Desk Head: 

Broker 1] AND GET HIM TO SEND OUT 6 MOS L 

IBOR AT 0.865 AND TO GET HIS BANKS SETTING IT 

HIGH. THIS IS VERY IMPORTANT BECAUSE HE 

IS QUESTIONING MY (AND OUR) WORTH ... GET 

6MOS HIGH PLEASE. 

mailed him spoke to him, he realises that the carrot 

might go if this carries on 

Ultimately, Cash Broker 1 sent the demanded revised Run Thru with the six-month 

Suggested Yen LIBOR at the level requested by the Senior Yen Trader, 0.865. 

In early 2009, the Senior Yen Trader made good on his threat to take business elsewhere 

when he was not completely satisfied. At the end of 2008, Derivatives Broker 1 retired for a 

brief period. The Senior Yen Trader then moved some of his business to another interdealer 

broker ("Broker B") because he believed Broker B was more responsive to his requests to 

manipulate Yen LIBOR. Upon Derivatives Broker 1 's return to work in April2009, he restored 

the relationship by ensuring that the Senior Yen Trader's Yen LIBOR requests were transmitted 

to Cash Broker 1 on a regular basis: 

April 28, 2009: 

Senior Yen Trader: need 6m up big time when 6m goes over the turn ... 

Derivatives Broker 1: ... i'll get to work on [Cash Broker 1] 

Senior Yen Trader: thx ... 

Derivatives Broker 1: ok with you, hasve you asked [Cash Broker 1] for his 

opinion yet? 

Senior Yen Trader: no to be honest [Derivatives Broker 2] is too busy he has 

too many lines i really rarely get [Cash Broker 1 's] insoght 

i rely on [Yen Broker at Broker B] more now 

Derivatives Broker 1: ok we can remedy that :-( i'll give them a kick up the ar se 

and contact [Cash Broker 1] direct 

Senior Yen Trader: yeah would be better 

d. ICAP Yen Brokers Used Another Cash Broker when Cash Brol\.er 1 Was 

Absent 

When Cash Broker 1 was not in the office, a Euro cash broker, Cash Broker 2, took over 

his responsibilities, including sending out Cash Broker 1 's daily Run Thru emails and 

determining the Suggested LIBORs to include in the email. Cash Broker 2 had little experience 

with the Yen market and relied on either information from the Yen derivatives brokers to make 

his LIBOR assessments, or directions left by Cash Broker 1. (At least once he was referred to as 

a "muppet" by his colleagues.) On multiple occasions, these other brokers provided false 

information to Cash Broker 2 in an effort to influence his LIBOR recommendations to benefit 

the Senior Yen Trader. 

23 
Cash Broker 2 typically followed the directions of the Yen Desk, with the result that his 

Suggested LIBORs reflected the requests of the Senior Yen Trader. At times, if necessary to 

change the Suggested LIBORs after Cash Broker 2 had already distributed a Run Thru for the 

day, the Yen Desk caused Cash Broker 2 to send out a revised Run Thru to ensure the Suggested 

LIBORs accurately reflected the Senior Yen Trader's requests. Derivatives Broker 1 and the 

Senior Yen Trader were pleased with the assistance received from Cash Broker 2, with 

Derivatives Broker 1 noting on occasion that the market followed Cash Broker 2's Run Thru 

recommendations. 

For example, on July 6, 2007, after Cash Broker 2 had distributed a Run Thru, the 

following exchange occurred: 

July 6, 2007: 

Derivatives Broker 1: tibors were higher again so please get that young man 

[Cash Broker 2] to ramp the 6mos up 

Yen Desk Head: we have asked again ansd will be telling everyone here 

around 86.5 i think we will tell him Ox6 spot is 87/86.375 

Derivatives Broker 1: thanks [Yen Desk Head] ... 

Yen Desk Head: we are telling [Cash Broker 2] that 6s strips out nearer 

0.8675 

Derivatives Broker 1: :-) like your style 

Yen Desk Head: just call me singh 

After this chat between the Yen Desk Head and Derivatives Broker 1, Cash Broker 2 (using Cash 

Broker 1 's email account) sent the following email with the six-month LIBOR revised higher, 

from 0.86 to 0.865, to accommodate the above request: 

From: Cash Broker 1 

Sent: Friday, July 6, 2007 7:20AM 

To: [recipient list omitted] 

Subject: FW: revised libor 

6M 

0.865 

Cash Broker 2's assistance was noted with approval: 

July 11, 2007: 

Derivatives Broker 1: think we ought to vote to keep [Cash Broker 1 's] cover on 

the libors as a permanent replacement.. 1m down ,3m and 

6m high! Have a good day,speak on the open. 

Senior Yen Trader: yes he is brilliant! 

Derivatives Broker 1: :-)remember the good ones,sure there will be some poor 

ones! 

24 
The following communications further reflect the use of Cash Broker 2 by the Yen Desk to 

continue the unlawful LIB OR services of Cash Broker 1: 

August 15, 2007: 

1st message: 

Derivatives Broker 1 :yeh think the way these swaps are getting given libors are 

falling quickly ... [Senior Yen Trader] needs 6m as high as 

[Cash Broker 1] can get away with ... when you speak to 

[Cash Broker 1] ca~1 you ask him what he thinks they will 

come in at (his run he sends out is often skewed to help 

[Senior Yen Trader]). i want high 6's ! ! ... 

Yen Desk Head: [Cash Broker 1] offtoday and tomorrow 

Derivatives Broker 1: oh christ..try and bully his colleague [Cash Broker 2] if you 

can [Yen Desk Head] .. [Senior Yen Trader] hurting today 

needs all the help he can 6m 

Yen Desk Head: ok ... done a number on him so fingers crossed, he is gonna 

send out 6s around 97, it looks more like 95 to me 

211d message: 

Senior Yen Trader: am getting hammered today had to happen i suppose 

Derivatives Broker 1: yeh all going wrong .. sorry mate .... [Cash Broker 1] off 

today and tomorrow!! [Yen Desk Head] bullying his 

colleague now to help out. 

3rd message (emphasis supplied): 

Derivatives Broker 1: [to colleague] think that may have been our doing a bit.. 

[Senior Yen Trader] needed them high so our boys sent 

them out high and it seems people copied them . .. to tell 

the truth the cash mkt was as thin as ours,so nobody really 

knows. 

August 16, 2007 (emphasis supplied): 

Cash Broker 1 : U will love these libors !! mlord 

Derivatives Broker 1: Fantastic work 

Cash Broker 1: Who knows where they might end .......... Best marl{ 

them high ..... too start with 

Derivatives Broker 1: yeh they copied your man [Cash Broker 2] yesterday so 

lets hope they do the same today. Thanks mate 

September 5, 2007 (emphasis supplied): 

Senior Yen Trader: any news from [Cash Broker 1]? 

Derivatives Broker 1: just got in ... Take that back, the cash guy has just walked 

in .... [Cash Broker 1] off today and tomorrow he [Cash 

25 
Broker 2] will put whatever we tell him ... 3m and 6m 

looking unchanged at the mom ... 

Senior Yen Trader: ok can we send out .98 again 

Derivatives Broker 1: ... yes mate ... the fwds are suggesting thses may go better 

bid thru the morning 

October 5, 2007 (emphasis supplied): 

Derivatives Broker 1: [to Junior Broker 1] IF [Cash Brol\:.er 1] IS OFF 

TODAY [Junior Broker 1] AND THESE LIBORS 

COME ROARING OFF I'LL HOLD YOU 

PERSONALY RESPONSIBLE ..... KEEP ONTO THAT 

OTHER MUPPET [Cash Broker 2] PLEASE IF SO ! ! 

THANKS MATE,GOOD LUCK TODAY 

e. ICAP Yen Brokers Tried to Conceal Yen LIBOR Services with Code 

Words 

In late 2007 and early 2008, the Yen Desk Head, Derivatives Broker 1 and Cash Broker 1 

became concerned that ICAP compliance might discover that they were aiding the Senior Yen 

Trader's attempts to manipulate Yen LIB OR. To conceal their unlawful activities, Derivatives 

Broker 1 began communicating by personal mobile telephones and text messages with Cash 

Broker 1. Derivatives Broker 1 also alerted the Senior Yen Trader about the need to be careful 

in their communications. 

November 1, 2007: 

Derivatives Broker 1: HI MATE,JUST HAD [Yen Desk Head] BACK ON RELIBORS,HAD A LOT OF COMPLIANCE PRESSURE 

RECENTLY DUE TO THE CREDIT PROBLEMS, WE 

BOTH NEED TO BE A LITTLE MORE SUBTLE IN 

OUR "VIEWS" .. .IE' I THINK THE FWDS ARE 

SUGGESTING THIS 6MOS LIBOR SHOULD BE 

LOWER .... ETC. MY E-MAILS ETC. NEED TO BE 

WORDED MORE CAREFUL Y 

January 10, 2008 (emphasis supplied): 

Derivatives Broker 1 : [Senior Yen Trader] had a call from [Yen Desk Head] ... 

[Cash Broker 1] getting concerned about how we are 

approaching him re-libors.It is nearly all thee-mails i send 

him,i will have to phrase my requests a lot more subtley but 

[Yen Desk Head] also said that you sometimes call down 

their box telling them to make sure [Cash Broker 1] moves 

certain periods certain ways. Compliance is a big thing in 

London now and [Cash Broker 1] wants himself 

26 
covered.Boxes are tapped and obviously my e-mals can 

be looked at.No body has siad anything but he wants to 

cover his bacl{side 

Senior Yen Trader: ok 

March 26, 2008 11 (via text message to personal mobile phone): 

Derivatives Broker 1: Hi mate can you knock 3m and 6m down 1 bp if you can 

3m and 6m down 1bp please 

Cash Broker 1: Guys have compliance asking about various things ie libors 

March 30, 2008 (emphasis supplied): 

Derivatives Broker 1: [to Senior Yen Trader] hi mate,sorry to see the libors not 

off as much as we hoped. Had a brief chat with [Cash 

Broker 1] ... I will obviously keep on his case but he has 

warned me again that compliance are all over the cash 

mid again and he has to appear whiter than white .... txt 

messages are ok but my e-mails need to worded very 

carefuly.At least lm looks good! 

April 10, 2008 (emphasis supplied): 

Derivatives Broker 1: [to Senior Yen Trader] i spoke to [Yen Desk Head] last 

night to find out libors and got a boll ocking for sending 

ib chats etc. regarding libors ... compliance still coming 

down heavy in london.All my requests will have to be 

phone calls or texts .... don't send anything yourself or 

call down any requirements over the line. decent libors 

anyway;-) 

In an effort to ensure that the Senior Yen Trader's requests survived detection from any 

review by !CAP's compliance staff, Derivatives Broker 1 and the Senior Yen Trader also started 

using code words to mask their discussions about manipulating LIBOR. As shown in the 

examples below, Derivatives Broker 1 and the Senior Yen Trader used the words "political 

correctness," "arbitrage," "arb" or "arbi" to denote requests and efforts to push Yen LIBOR 

fixings in a particular direction on the Senior Yen Trader's behalf. 

November 13, 2007 (emphasis supplied): 

Derivatives Broker 1: [to Cash Broker 1] in these days of "political correctness" 

is it true that there is a fair bit of pressure holding 6 mos 

libor down today? I think this will probably suit. 

11 On this date, !CAP's Yen Desk responded to !CAP's "Information Services" Department's request 

for a description of the types of information that Yen brokers sent to customers. Contrary to what Cash 

Broker 1 believed, this request for information was not a compliance review. 

27 
January 28, 2008 (emphasis supplied): 

Derivatives Broker 1: [Cash Broker 1 's] libors .. sees 1m and 3m coming in 

unchanged ... 6m down 1/4bp .. .. arbi has made him sent 

them out a bit higher, but not confident he'll get them up 

February 21, 2008 (emphasis supplied): 

Senior Yen Trader: cu lmow what ineed arbitrage wise? you 

Derivatives Broker 1: high 3m low 6m [Cash Broker 1] reckons 1m could come 

off 1/2bp today (looks 1 bp too high to him at the 

mom) .... 3m -1/8th ..... 6m -1/8th 

Senior Yen Trader: ok lets hope the arby worl\.:s! 

Derivatives Broker 1: well he has sent the same as yesterday, but just warning us . 

. . when does your big 1m roll out? 

f. ICAP Brokers Strategized with the Senior Yen Trader to Carry Out His 

Manipulative Schemes 

ICAP Yen brokers' participation in the Senior Yen Trader's manipulative scheme went 

beyond passing along his requests and altering market reports to his benefit. The Yen brokers, in 

pmiicular Derivatives Broker 1, strategized and acted in concert and as a team with the Senior 

Yen Trader to ensure his manipulative goals stood the best chance of success. 

i. Derivatives Broker 1 Advised the Senior Yen Trader to Push 

UBS' Submitter to Make False Submissions 

Evidencing his commitment to make sure the Senior Yen Trader's attempts to manipulate 

Yen LIBOR were successful, Derivatives Broker 1 focused on the rate submissions made by the 

Senior Yen Trader's own banlc UBS. Derivatives Broker 1 kept track ofUBS' Yen LIBOR 

submissions (all panel banlc submissions are published daily) and advised the Senior Yen Trader 

to make sure his own LIBOR submitter at UBS was assisting in making the schemes successful. 

February 27, 2008: 

Derivatives Broker 1: Hi mate,hope those libors suited, [Cash Broker 1] said the 

just kept getting better bid throughout the morning and 

should have fixed a bit higher than they did. 

Senior Yen Trader: ok neec low 6's relative to 3m basically 

Derivatives Broker 1: yep try and move the 3m more than the 6m .. [Cash Broker 

1] knows what we are after,will remind him again 

later ... should push that front lib/tib out you can help 

yourself out a bit with these libors,you are at the low end of 

1m 3m and 6m, but you can afford to move 6m up 2bps 

28 
without affecting the fix ie; you will still be cut off the 

bottom for fixing purposes,but you will affect 1m and 3m 

if you can move them up(you were 1 of the very few that 

never moved up yesterday. Try and have a word with [UBS 

Yen LIBOR Submitter] 

April25, 2008 (emphasis supplied): 

May 29, 2008: 

Derivatives Broker 1: you need to make sure [UBS Yen LIB OR Submitter] 

doesn't move these up where he was calling them ........ don't 

want all the hard work getting shot away by your own 

banlc 

Senior Yen Trader: i know i am trying 

Derivatives Broker 1: it will be rather ironic if [Cash Broker 1] and [Yen Broker 

at Broker B] do their best and [UBS Yen LIBOR 

Submitter] shoots you in the foot 

Senior Yen Trader: yeah just bought him a coffee! 

Derivatives Broker 1: :-D could be the cheapest bribe of your life! 

Derivatives Broker 1: if [UBS Yen LIB OR Submitter] his marking his 0/6's there 

you are going to have to work hard on his libor sets ...... if 

[Cash Broker 1] is doing his best to get them low and your 

own banlc fixes high! 

Senior Yen Trader: i knoww mate we are holding 6m but bring 3m down 

Derivatives Broker 1: ... [Cash Broker 1] has knocked 3m down small( already v 

low and says if it goes any further he will lose credibility) 

and 6m down another 1/2bp 

Senior Yen Trader: thx mate 

ii. ICAP Derivatives Broker 1 Was More Than Just a Conduit for 

Manipulative Requests; He Was an Active Conspirator 

In the summer of2009, Derivatives Broker 1 partnered with the Senior Yen Trader, 

helping him to strategize on broader, long-term schemes to manipulate Yen LIBOR and ensure 

his manipulative goals were achieved. These schemes, which the Senior Yen Trader refened to 

as the "Turn Campaign" and "Operation 6M," began in June 2009. 12 The Senior Yen Trader 

informed Derivatives Broker 1 of his multi-pronged effotis to manipulate six-month Yen LIBOR 

over the summer of2009, first by pushing six-month Yen LIBOR miificially high throughout the 

month of June, then forcing it to "collapse" by late summer. 

12 The Commission made detailed findings concerning the Turn Campaign and Operation 6M, including 

the role ofiCAP and other interdealer brokers, in the Order against UBS at pp. 29-36. 

29 
Derivatives Broker 1 conspired with the Senior Yen Trader in this effort, aiding him in 

working with other banks that were willing to participate in the scheme, and pushing other ICAP 

brokers, including Cash Broker 1, to provide assistance by "chasing" after other banks and 

issuing the skewed Suggested LIBORs. 

The following are examples of communications regarding these schemes: 

June 2, 2009: 

1st message: 

Senior Yen Trader: pls talk to [Cash Broker 1] re [Bank B] 

Derivatives Broker 1: already e-emailed and texted earlier busy trying to talk to 

[Cash Broker 1] on your behalf mate, that's why i didn't get 

the 0/6's 11th down to you 

Senior Yen Trader: np once these 6m fras are out the way i'll need 6m to 

collapse mid aug 

Derivatives Broker 1: not until after the first couple of weeks in july though? 

Derivatives Broker 1: ok gotcha 

Senior Yen Trader: well i'll try to trade out of them once people see the 6m go 

up ... 

Derivatives Broker 1: ... if i start bugging [Cash Broker 1] now he'll have the 

ache with it before we get to the crunch time .. .i have the 

17th noted down to have a chat and to get him mentioning 

the turn to his accounts that gives us plenty of time to get 

people thinking 

Senior Yen Trader: thx 

211d message: 

Derivatives Broker 1: [to Cash Broker 1] Hi mate, Do you have much contact 

with Banlc B? just wondering why he is moving his 3m up 

so aggressively, seems to up it one day lower it the next! 

Arbi pressure seems to be pushing lm and 3m lower during 

tokyo time. Any views gratefully accepted. [Derivatives 

Broker 1] 

June 16, 2009 (emphasis supplied): 

Derivatives Broker 1: Good morning mate ..... ,the "turn campaign" begins 

today. Will put an e-mail together at lunchtime to [Cash 

Broker 1]. 

Senior Yen Trader: thx 

30 
June 23, 2009 (emphasis supplied): 

Senior Yen Trader: i cld do with unch in 3m all it does is put pressure on tibor 

Derivatives Broker 1: yeah [Cash Broker 1] hasn't moved his libors for about 8 

days now 

Senior Yen Trader: as long as 6m goes up over the turn ... 6m is huge for me 

onmonday ... 

Derivatives Broker 1: i know mate, i have been putting arbi pressure on [Cash 

Broker 1] and [Yen Desk Head] ... would help your 

cause to also speak to [Yen Desk Head] on friday 

regarding the turn squeeze and its importance ... i will 

remind you .... 

Senior Yen Trader: thanks i will get [Yen Broker at Broker B] on the case too 

remind me to get in touch with [Banl( G Yen LIB OR 

Submitter] 

Derivatives Broker 1: yeah need to pull out the big guns for this one, don't let 

[Banl( G Yen LIB OR Submitter] forget either :-)es 

June 24, 2009 (emphasis supplied): 

Derivatives Broker 1: Morning [Senior Yen Trader], Rbs must have had some 

fixings, not helping 

Senior Yen Trader: he on drugs for once i just want them static and they are 

falling! ... pls try to keep 1y low on screen mate yeah ijust 

need thgis 6m gap for 2weeks] 

Derivatives Broker 1: will do my best mate 

Senior Yen Trader: then they can all go down hopefully tibor will stay high 

operation 6m. 

Derivatives Broker 1: ;-) 

June 29, 2009 (emphasis supplied): 

1st message: 

Senior Yen Trader: that 6m was a disaster for me i need [Cash Broker 1] to try 

and get those who didn't move higher 

Derivatives Broker 1: he has already gone round some of the fixers 

questioning their sets .... i spoke to him late last night. He 

has chased them and cannot understand their 

motives.Its not even the rbs and [Banl( D's] of the world 

that fcked us he has no influence on Banl( C, would have 

spoken to [Bank H] but the guy is pretty stuborn and 

reckons he's always right. 

Senior Yen Trader: [Bank C] [Yen Broker at Broker B] is talking to i reckon i 

maybe able to get another favour from [Bank G Yen 

LIBOR Submitter] oh well you can't win em all i guess the 

problem was the fall immediately before the turn 

31 
Derivatives Broker 1: ok [Cash Broker 1] has spoken with [Bank H] and [BankE] 

not sure about [Bank B] 

Senior Yen Trader: yeah [Bank B] is one that can really help 

211 d message: 

Derivatives Broker 1: very important arbitrage flow today on the libors ... 

looking for 3m to go up 1/2bp (tibor up lbp) and 6m to go 

up at least 2bps (dec/jan turn) ... please acknowledge you 

have got me on this mate. 

Junior Broker 2: ok will have a word with [Cash Broker 1] when he's in 

Derivatives Broker 1: thanks is impmiant 

3rd message (via text message to Cash Broker 1 's personal mobile phone): 

Derivatives Broker 1: Morning mate, its turn day! 3m tibor up 1 bp 6m up 0.5 bp 

arbitrage looking for 3m libor up 0.75 and 6m up at least 

2bp. Got rather a large int every little helps. Thanks mate. 

4th message (Responding to Cash Broker 1 's daily Run Thru email containing 

Suggested LIBORs): 

Derivatives Broker 1: Thanks [Cash Broker 1] 

By the end of July, the Senior Yen Trader and Derivatives Broker 1 shifted their efforts 

to lowering six-month Yen LIBOR in August to benefit his derivatives trading positions that 

were due to reset in mid-August. Derivatives Broker 1 advised the Senior Yen Trader on how to 

use his manipulative effmis to move the Yen LIB OR in the direction they sought without being 

too obvious to the market. 

July 22, 2009 (emphasis supplied): 

Senior Yen Trader: 11th aug is the big date i still have lots of 6m fixings till 

the lOth 

Derivatives Broker 1: christ keeps getting extended started off as 14th of this 

month:-) 

Senior Yen Trader: i know 

Derivatives Broker 1: if you drop your 6m dramatically on the 11th mate, it 

will look v fishy, especially if [Bank I] and [Bank G] go 

with you. I'd be v careful how you play it, there might be 

cause for a drop as you cross into a new month but a couple 

of weeks in might get people questioning you. 

Senior Yen Trader: don't worry will stagger the drops ie Sbp then Sbp 

Derivatives Broker 1 : ok mate, don't want you getting into sh it 

Senior Yen Trader: us then [Bank G] then [Bank I] then us then [Bank GJ then 

[Yen Bank I] 

Derivatives Broker 1: great the plan is hatched and sounds sensible 

32 
July 23, 2009 (emphasis supplied): 

Derivatives Broker 1: you [UBS] ought to start moving your 6m down a little 

now as you won't affect the fix, then if you jump down 

5bps thereafter it will have more of an impact. 

Senior Yen Trader: yeh next week 

Derivatives Broker 1: you can go about 4bps now and not move it 

Senior Yen Trader: when our friend leaves everyting will be much easier 

Derivatives Broker 1: ;-) nice knowing you have the 3 top fixers all onside in 

the 6m it can really shift it if the arbi kicli:s in 

Senior Yen Trader: yeah ... hopefully we can put 3m tibor back up on monday 

Derivatives Broker 1: reckon its looking that way ... 

Senior Yen Trader: [my supervisor] was so pissed off 

Derivatives Broker 1: looking closely at that 6m panel there are only 5 banks 

over 66 so you'll need to start getting down below that 

to have a decent impact, thats why a 3 or 4bp gradual 

move next week will not look conspicuous before the 

date the arbi really needs to shift. 

g. ICAP Broli:ers Tried to Keep UBS Business by Offering UBS Unlawful 

LIBOR "Services" After the Senior Yen Trader Left UBS 

In September 2009, the Senior Yen Trader left UBS, and in January 2010 he began 

working at another panel bank as a Yen derivatives trader. The Senior Yen Trader's depmiure 

from UBS caused great concern for the Yen Desk, as their trading volume tied to the fixed fee 

paid by UBS declined and they anticipated a significant loss in revenue as a result. As the Yen 

Desk Head noted in a September 9, 2009 chat regarding the departure of the Senior Yen Trader: 

"obviously we still have a fixed fee in place with ubs Tokyo ... and [Cash 

Broker 1] gets a small percentage cause we always hassle him for cash 

manouevres ... our fixed fee gonna go to zip ... disaster can see our 75k 

amonth going to 25 ... " 

During the fall of 2009, Derivatives Broker 1 continued to work for UBS, servicing other 

Yen traders who took responsibility for the Senior Yen Trader's outstanding trading positions. 

In a bid to keep UBS' business, Derivatives Broker 1 repeatedly offered to a UBS Yen Trader 

who had worked closely with the Senior Yen Trader ("UBS Yen Trader 2") the services of Cash 

Broker 1 for influencing the Yen LIB OR fixings. The following demonstrate the effmis he took 

to maintain the relationship with UBS: 

August 3, 2009: 

Derivatives Broker 1: [to UBS Yen Trader 2] ... I know what you need in terms 

of libors and will let you know what my cash guru in 

london honestly feels as to their movements each day .... he 

has his "arbitrage" instructions! 

33 
September 10, 2009: 

Derivatives Broker 1: Happy friday mate ... libors still heading in the right 

direction. 

UBS Yen Trader 2: good mng monday is the d-day 

Derivatives Broker 1: big fix? 

UBS Yen Trader 2: yeah both 3s and 6s 

Derivatives Broker 1: low in both? 

UBS Yen Trader 2: ye 

Derivatives Broker 1: ok will call [Cash Broker 1] on the train into work [UBS 

Yen Trader 2], you realise that you have the ability to 

influence the 3m fix, you are currently sitting at the upper 

end of the range. The 6m will have to come down to others 

as you are already v low. 

UBS Yen Trader 2: yep 

Derivatives Broker 1: i'll remind you to chase your cash boys as well:-) 

UBS Yen Trader 2: cool:-) on monday 

Derivatives Broker 1: yes 

October 21, 2009: 

UBS Yen Trader 2: i dont need to be speaking to ICAP ldnjust for the libors 

sake do i to get the timely updates our guys negotiating 

new bro, think icap trying to make case about their good 

libor indications 

Derivatives Broker 1: i think you do need to talk to them ... mainly for [Cash 

Broker 1 's] lib or calls and influence. He can save you a lot 

of money by getting certain accounts to move to our 

favour and often calls the libor moves very accurately. 

[Yen Desk Head] pays [Cash Broker 1] a monthly amount 

to keep the flow of info coming and to keep him onside .... 

[Cash Broker 1] has the ability to save you lots every 

month ... 

UBS Yen Trader 2: ok 

h. ICAP Continued to Aid the Senior Yen Trader After He Moved from 

UBS to Another Panel Bank 

When the Senior Yen Trader began trading for Bank Bin early 2010, Derivatives Broker 

1 resumed his relationship with the Senior Yen Trader. Derivatives Broker 1 and Cash Broker 1 

continued to help the Senior Yen Trader try to manipulate Yen LIB OR, until the Senior Yen 

Trader was terminated by Banlc Bin the fall of2010. 

During this period, on at least a few occasions, the Senior Yen Trader also sought the 

assistance of a third broker in London who worked on another ICAP brokering desk, focusing 

mainly on Sterling-based transactions ("Sterling Broker"), in his attempts to manipulate Yen 

34 
LIB OR. The Senior Yen Trader knew the Sterling Broker from when both previously worked at 

RBS. The ICAP Sterling Broker was a friend ofthe RBS Yen LIBOR Submitter, and readily 

agreed to help the Senior Yen Trader by asking the RBS Yen LIB OR Submitter to make 

submissions that would benefit the Senior Yen Trader. The RBS Yen LIB OR Submitter 

accommodated these requests. 

March 3, 2010 (emphasis supplied): 

1st message: 

Senior Yen Trader: 

Sterling Broker: 

Senior Yen Trader: 

Sterling Broker: 

Senior Yen Trader: 

2nd message : 

Sterling Broker: 

RBS Yen Submitter: 

Sterling Broker: 

RBS Yen Submitter: 

Sterling Broker: 

RBS Yen Submitter: 

Sterling Broker: 

RBS Yen Submitter: 

Sterling Broker: 

RBS Yen Submitter: 

Sterling Broker: 

i really need a low 3mjpy libor into the imm any 

favours you can get with the due at rbs would be much 

appreciated even if he on;ly move 3m down 1 bp from 

25 to 24 

i'll give him a nudge later, see what he can do 

thanks mate really really would appreciate that 

haven't seen him since i left so might buy him a steak to 

catch up 

yeah ... i have a huge fix on the imm so if he moves 

down 1 bp now and leaves it that would be great 

can i pick ur brain? 

yeah 

u see 3m jpy libor going anywhere btween now and 

imm? 

looks fairly static to be honest , poss more pressure on 

upside , but not alot 

oh we hve a mutual friend who'd love to see it go 

down, no chance at all? 

haha [Senior Yen Trader] by chance 

shhh 

hehehe , mine should remain flat , always suits me if 

anything to go lower as i rcve funds 

gotcha, thanks, and, if u cud see ur way to a small 

drop there might be a steak in it for ya, haha 

noted;-) 

8-) 

3rd message sent the following day: 

RBS Yen LIB OR Submitter: Libor lower ;-) 

May 13,2010 (emphasis supplied): 

Sterling Broker: 

RBS Yen Submitter: 

Sterling Broker: 

alloo, can i just chk ur leaving urs unch? 

oh yes[,] might even just go lower for the fun of it :-) 

really, how much 

35 
RBS Yen Submitter: 

Sterling Broker: 

Know [sic] unchanged but i knew [Senior Yen 

Trader] would get exicted [sic] by that 

ha 

By mid-20 10, Cash Broker 1 expressed the belief that his ability to influence the Yen 

market had waned. Despite this, Derivatives Broker 1 encouraged and aided in the Senior Yen 

Trader's ongoing conduct and continued to push Cash Broker 1 to assist the Senior Yen Trader. 

June 2, 2010: 

June 22, 2010: 

Derivatives Broker 1: Hi mate,no change libors, you leaving them until June 

rolls? [Cash Broker 1] has 6m turn at the end of the month 

priced at 0.5bps, says he could move his suggestion by up 

to 1.5bps but is doubtful whether anyone willlisten.He will 

start to bring turn conversations in with a couple of his 

guys next week, reckons its far too early to go down that 

route yet. 

Senior Yen Trader: think so ok thx 

Derivatives Broker 1: Hi [Senior Yen Trader], soory mate forgot to remind you to 

talk to [Sterling Cash Broker], hope your memory was 

better than mine. Rbs helped in the 3m anyhow 

Senior Yen Trader: that was [Sterling Cash Broker] 

Derivatives Broker 1: good;-) ... 

Senior Yen Trader: ... i hope the arbi will push libors up 

Derivatives Broker 1: yeah, have had words .... [Cash Broker 1] not convinced 

people will listen, but said his arbi view, could see his 

suggestion up at 0.46 (did stress not sure anyone will take 

any notice, but the turn had been discussed). 

Senior Yen Trader: what did pople say when they discussed it? 

Derivatives Broker 1 : was emphasising the $ turn, people a little uncommital on 

the yen. 

i. ICAP Brokers Aided and Abetted Attempts to Manipulate by Yen 

Traders at Other Panel Banks 

Although ICAP's Yen brokers engaged in unlawful conduct primarily at the behest ofthe 

Senior Yen Trader, in a limited number of other instances, various Yen brokers on both the Yen 

and Cash Desks attempted to influence Yen LIB OR submissions for the purposes of 

manipulating Yen LIBOR on behalf of other Yen derivatives traders in the market. For example, 

in December 2010, Cash Broker 1 attempted to develop a relationship with Bank D Yen Trader, 

an active trader who appeared to be becoming more dominant in the wake of Senior Yen 

Trader's departure. Cash Broker 1 offered services similar to those provided to the Senior Yen 

Trader by proposing to influence Yen LIB OR submitters to make submissions that could benefit 

36 
Banlc D Yen Trader. Thus, Cash Broker 1 offered to contact Yen LIBOR submitters on behalf of 

the Bank D Yen Trader. Cash Broker 1 's efforts on behalf of Bank D continued through January 

2011. 

December 1, 2010: 

Banlc D Yen Trader: Hope this will push libors down 

Cash Broker 1: ok we need lower libors tomorrow yes? 

Bank D Yen Trader: Yeah ... 

Cash Broker 1: ok ill work some magic for tomorrow:-) 

Bank D Yen Trader: I want 3. And 6m libor a lot lower... ? How? 

Cash Broker 1: we wait and see, tomorrow lower friday a little bit more but 

ill do my best 

Banlc D Yen Trader: Yeah ... I think yen libors shud be lower but ppl tend to 

keep them higher whereas usd libors ppllooks like 

manipulately put them higher 

Cash Broker 1: ill work some magic tomorrow hopefully, 3m 196m 35 

Banlc D Yen Trader: Mate ... 3mth is already below 19 

Cash Broker 1 : mistype 18 

Bank D Yen Trader: That will be nice. 

Cash Broker 1: ok i am on the case for u 

Bank D Yen Trader: Thank u mate 

December 20, 2010: 

1st message: 

Cash Broker 1: 

Banlc D Yen Trader: 

Cash Broker 1: 

Banlc D Yen Trader: 

2nd message: 

mmg [Bank D Yen Trader], haws things? ... libors 

unchnged .... still after low 3m? 

morning. yeah ... i still like it to be as low as possible 

ok still working on it for you 

thank you 

Bank D Yen Trader: i now wud like 6m libor to go up a lot 

Cash Broker 1 : ok tomorrow i move 

December 22, 2010: 

Cash Broker 1 : 

Bank D Yen Trader: 

Cash Broker 1: 

Banlc D Yen Trader: 

Cash Broker 1 : 

Bank D Yen Trader: 

3m .1875 6m 349 :-) 

thx mate so 6m libor hight· finally? ... 

. . . yes ... i amworking my magic 

thanlc you! ... 

sorry [Banlc D Yen Trader], people slow to change but i am 

still working on it regarding libors 

Thx try 

37 
4. Inadequate Controls and Supervision Allowed Broker Misconduct to 

Continue for Years 

During the relevant period, ICAP failed to implement adequate internal controls and 

procedures to govern its Yen brokers' communications and interactions with clients and 

prospective clients. Nor did it adequately supervise and oversee its Yen brokers and the Yen and 

Cash Desks. 

ICAP plc, a global entity, had set up a regional-based system of policies, procedures, and 

controls that applied to its entire family of subsidiaries during the relevant time period. ICAP 

plc's subsidiaries allocated compliance employees by region. ICAP was part ofthe Europe, 

Middle East and Africa ("EMEA") region. Although ICAP had only a dedicated chief 

compliance officer, he was supported by twelve other compliance employees among ICAP plc's 

EMEA-based subsidiaries. This system of compliance failed to detect and deter the wrongful 

conduct of the IC~P brokers. 

Through this system of compliance, ICAP did not have adequate internal controls, 

policies and procedures to guide and monitor Yen brokers in their communications with clients, 

or the provision of market information or market color to clients and others. Furthermore, ICAP 

had no procedures for approval of the dissemination of market information, or for review and 

verification of the basis for the market information being disseminated by ICAP brokers. 

Accordingly, Cash Broker 1 was able to send out the skewed Suggested LIBORs in his Run 

Thrus without detection. 

Within ICAP, the Yen and Cash Desks were inadequately supervised. The Yen brokers, 

including the Yen Desk Head, worked with minimal supervision from senior ICAP management. 

Cash Broker 1, the only Yen cash broker at ICAP, operated independently with little to no 

supervision from the head of the Cash Desk. Likewise, ICAP left compliance oversight to the 

Yen and Cash Desk Heads who were expected to report any suspicious conduct to !CAP's 

compliance officer. This system of compliance and supervision was of course all but useless as 

the Yen Desk Head was complicit in the misconduct taking place on the Yen Desk. 

These compliance flaws were exacerbated by the fact that the Yen Desk was not 

perceived as a potential compliance risk, and thus was not subjected to any compliance reviews 

or audits during the relevant period, resulting in no reviews or audits of the Yen Desk for more 

than four years. ICAP Securities Limited, another EMEA entity, was responsible for the audit 

and risk management functions at ICAP, and determined which ofiCAP's brokering desks 

required an audit. While the Cash Desk was audited twice during the relevant period, the audit 

included only a sampling of broker communications, and accordingly, Cash Broker 1 's 

misconduct was not discovered. If an audit had been conducted of the Yen Desk, and the 

internal and external communications ofthe Yen and Cash Desks had been reviewed, ICAP 

likely would have discovered that: (1) the Senior Yen Trader was the exclusive client of 

Derivatives Broker 1 and a significant source of revenue for the Yen Desk, creating potential 

conflicts of interest; (2) the ICAP Yen brokers engaged in sustained efforts to manipulate Yen 

LIB OR on behalf of the Senior Yen Trader; and (3) the "LIB OR services" for which ICAP 

38 
successfully negotiated a special bonus for Cash Broker 1 were in fact the dissemination of false 

market information intended to benefit the Senior Yen Trader. 

I CAP's lack of specific internal controls and procedures relating to external 

communications, and distinguishing between permissible and impermissible market information 

provided by its Yen brokers to clients and others, as well as its overall lax supervision of the Yen 

and Cash Desks, allowed the misconduct to continue unabated throughout the relevant period. 

IV. 

LEGAL DISCUSSION 

A. ICAP Knowingly Caused Certain Panel Banks to Make False, Misleading or 

Knowingly Inaccurate Reports Concerning Yen Borrowing Costs in Violation of 

Section 9(a)(2) of the Act 

Section 9(a)(2) of the Act makes it unlawful for any person "knowingly to deliver or 

cause to be delivered for transmission through the mails or interstate commerce by telegraph, 

telephone, wireless, or other means of communication false or misleading or knowingly 

inaccurate reports concerning crop or market information or conditions that affect or tend to 

affect the price of any commodity in interstate commerce .... " 7 U.S.C. § 13(a)(2) (2006); US. 

v. Brooks, 611 F.3d 678, 691-93 (5th Cir., 2012) cert. denied, 2013 U.S. Lexis 434 (U.S. Jan. 7, 

2013); United States v. Valencia, 394 F.3d 352, 354-355 (5th Cir. 2004); see also CFTC v. 

Johnson, 408 F. Supp. 2d 259, 267 (S.D. Tex. 2005) (same). 

At times, throughout the relevant period, certain ICAP brokers knowingly caused to be 

delivered through the mails or interstate commerce false or misleading or knowingly inaccurate 

reports concerning Yen bank borrowing rates, through the form of Suggested LIBORs, which is 

market information that affects or tends to affect the fixing or pricing of Yen LIB OR, a 

commodity in interstate commerce. Each business day, Yen panel banks, through the 

transmission of electronic spreadsheets to Thomson Reuters, made Yen LIB OR submissions in 

contribution to the daily fixing of Yen LIB OR for various tenors through the mails or interstate 

commerce. Yen LIBOR panel banks' submissions were delivered through the mails or interstate 

commerce by the daily dissemination and publication globally, including into the United States, 

ofthe panel banks' submissions as well as the daily official Yen LIBOR fixing by Thomson 

Reuters on behalf of the BBA and by other third pmiy vendors. The panel banks' submissions 

are used to determine the official published rates for Yen LIB OR, which are calculated based on 

a trimmed average ofthe submissions. 

The Yen LIB OR panel banks' submissions contain market information concerning the 

costs of borrowing unsecured funds in Yen in particular tenors, the liquidity conditions and stress 

in the money markets, and the panel banks' ability to borrow Yen in the London interbank 

market. Such market information affects or tends to affect the prices of commodities in interstate 

commerce, including the daily rates at which Yen LIB OR is fixed. 

39 
Certain ICAP Yen brokers understood and expected that many of the Yen panel banks 

relied on market information from those ICAP brokers concerning the Yen borrowing rates in the 

London interbank market. Indeed, ICAP brokers provided oral or written Yen LIB OR 

predictions, i.e., the "Suggested LIBORs," that reflected their unbiased and honest assessment of 

Yen borrowing costs in the interbank market. However, to benefit certain ICAP clients, in 

particular the Senior Yen Trader, and to assist their efforts to attempt to manipulate the fixing of 

Yen LIB OR on their behalf, ICAP Yen brokers often knowingly disseminated false, misleading 

and lmowingly inaccurate market information to the Yen Panel banks through two primary 

means: (1) Cash Broker 1 or others provided skewed Suggested LIBORs, through the daily Yen 

LIB OR Run Thru emails or oral communications with submitters or traders at the Yen LIB OR 

panel banks; and (2) ICAP brokers directly pressured Yen LIBOR submitters and traders at panel 

banks to submit certain rates, that were skewed to reflect rates beneficial to the Senior Yen 

Trader and at times other traders. At times, certain Yen panel banks used I CAP's skewed 

Suggested LIBORs in determining and making their Yen LIB OR submissions to the BBA. As a 

result, those Yen LIB OR submissions were false, misleading or knowingly inaccurate because 

the panel banks' submissions purported to reflect the panel banks' perceived costs of borrowing 

Yen in the interbank market but in reality, reflected in whole or in part the rates that benefited 

the trading positions ofiCAP's clients. 13 

Accordingly, by certain brokers' actions designed and intended to benefit clients and 

themselves, ICAP, through these brokers and a desk manager, knowingly caused the panel banks 

to deliver through the mails or interstate commerce false or misleading or knowingly inaccurate 

market information that affects or tends to affect a commodity in interstate commerce, including 

Yen LIBOR and violated Section 9(a)(2) ofthe Act, 7 U.S.C. § 13(a)(2) (2006). 

B. ICAP Manipulated Yen LIBOR at Times for Certain Tenors 

Together, Sections 6(c), 6(d) and 9(a)(2) of the Act prohibit acts of manipulation or 

attempted manipulation. Section 9(a)(2) of the Act makes it unlawful for "[a]ny person to 

manipulate or attempt to manipulate the price of any commodity in interstate commerce, or for 

future delivery on or subject to the rules of any registered entity .... " 7 U.S. C. § 13(a)(2) 

(2006). Section 6(c) of the Act authorizes the Commission to serve a complaint and provide for 

the imposition of, among other things, civil monetary penalties and cease and desist orders if the 

Commission "has reason to believe that any person ... is manipulating or attempting to 

manipulate or has manipulated or attempted to manipulate the market price of any commodity, in 

interstate commerce, or for future delivery on or subject to the rules of any registered entity, ... or 

otherwise is violating or has violated any of the provisions of [the] Act .... " 7 U.S.C. § 9 

(2006). Section 6(d) ofthe Act is substantially identical to Section 6(c). See 7 U.S.C. § 13b 

(2006). 

Manipulation under the Act is the "intentional exaction of a price determined by forces 

other than supply or demand." Frey v. CFTC, 931 F.2d 1171, 1175 (7th Cir. 1991). The 

13 In finding that certain Yen LIBOR panel banks made submissions that mirrored !CAP's Suggested 

LIBORs, the Commission is not addressing here whether such banks knowingly made false, misleading 

or knowingly inaccurate Yen LIBOR submissions. 

40 
following four elements must be met, by a preponderance of the evidence, to show a successful 

manipulation has occurred: 

(1) the [respondent] had the ability to influence market prices; 

(2) the [respondent] specifically intended to do so; 

(3) artificial prices existed; and 

(4) the [respondent] caused an artificial price. 

In re Cox, [1986-1987 Transfer Binder] Comm. Fut. L. Rep. (CCH) ~ 23,786 at 34,061 

(CFTC July 15, 1987). The test for manipulation, however, is a practical one: 

We think the test of manipulation must largely be a practical one if the purposes 

of the Commodity Exchange Act are to be accomplished. The methods and 

techniques of manipulation are limited only by the ingenuity of man. The aim 

must be therefore to discover whether conduct has been intentionally engaged in 

which has resulted in a price which does not reflect basic forces of supply and 

demand. 

Cargill v. Hardin, 452 F.2d 1154, 1163 (8th Cir. 1971). 

"[I]ntent is the essence of manipulation." Indiana Farm Bureau Cooperative Ass'n, Inc., 

[1982-1984 Transfer Binder] Comm. Fut. L. Rep (CCH) ~ 21,796, at 27,282 (CFTC Dec. 17, 

1982). The manipulator's intent separates "lawful business conduct from unlawful manipulative 

activity." Id. at 27,283. To prove the intent element of manipulation, it must be shown that 

ICAP "acted (or failed to act) with the purpose or conscious object of causing or effecting a price 

or price trend in the market that did not reflect the legitimate forces of supply and demand." Id. 

The Commission has observed that "intent must of necessity be inferred from the 

objective facts and may, of course, be inferred by a person's actions and the totality of the 

circumstances." In re Hohenberg Bros., [1975-1977 Transfer Binder] Comm. Fut. L. Rep. 

(CCH) ~ 20,271 at 21,477 (CFTC Feb. 18, 1977). "[O]nce it is demonstrated that the alleged 

manipulator sought, by act or omission, to move the market away from the equilibrium or 

efficient price- the price which reflects market forces of supply and demand- the mental 

element of manipulation may be inferred." Indiana Farm Bureau, ~ 21,796 at 27,283. "It is 

enough to present evidence from which it may reasonably be inferred that the accused 

'consciously desire[d] that result, whatever the likelihood of that result happening from his 

conduct."' Id. (quoting US. v. United States Gypsum Co., 438 U.S. 442,445 (1978)). A profit 

motive may also be evidence of intent, although profit motive is not a necessary element of an 

attempted manipulation. See In re DiPlacido [2007-2009 Transfer Binder] Comm. Fut. L. Rep. 

(CCH) ~ 30,970, at 62,484 (CFTC Nov. 5, 2008) (citing In re Hohenberg Bros. Co., ~20,271 at 

21,478)), aff'd, 364 Fed. Appx. 657 (2d Cir. 2009). 

An artificial price (also termed a "distorted" price) is one "that does not reflect market or 

economic forces of supply and demand." Cox,~ 23,786 at 34,064; Indiana Farm Bureau, 

~ 21,796 at 27,288 n. 2. As the Commission noted with approval in DiPlacido, ~ 30,970 at 

62,484 (quoting Indiana Farm Bureau,~ 21,796 at 27,300 (Commissioner Stone concurring)), a 

41 
Commissioner has commented: "[t]his is more an axiom than a test." In determining whether an 

artificial price has occurred: 

[O]ne must look at the aggregate forces of supply and demand and search for 

those factors which are extraneous to the pricing system, are not a legitimate part 

of the economic pricing of the commodity, or are extrinsic to that commodity 

market. When the aggregate forces of supply and demand bearing down on a 

particular market are all legitimate, it follows that the price will not be artificial. 

On the other hand when a price is effected by a factor which is not legitimate, the 

resulting price is necessarily artificial. Thus, the focus should not be as much on 

the ultimate price as on the nature of the factors causing it. 

Indiana Farm Bureau,~ 21,796 at 27,288 n. 2. See also DiPlacido, ~ 30,970 at 62,484 (finding 

that the placement of uneconomic bids or offers results in miificial prices because those prices 

are not determined by the free forces of supply and demand on the exchange"). 

Causation of artificial prices is established when it is demonstrated that artificial market 

prices resulted from the conduct of a trader, or group of traders acting in conce1i, rather than 

legitimate forces of supply and demand. See Cargill, Inc. v. Hardin, 452 F.2d 1154, 1171-72 

(8th Cir. 1971) (price squeeze "intentionally brought about and exploited by Cargill"); Cox, 

~ 23,786 at 34,067 (proof of causation requires the Division to show that "the respondents' 

conduct 'resulted in' artificial prices"). 

There can be multiple causes of an miificial price. DiPlacido, ~ 30,970, at 62,485. The 

manipulator's actions need not be the sole cause of the miificial price. "It is enough for purposes 

of a finding of manipulation in violation of Sections 6(b) and 9 of the Act that respondents' 

action contributed to the price [movement]." In re Kosuga, 19 A.D. 603, 624 (1960). See also 

Cox,~ 23,786 at 34,066 (recognizing there can be multiple causes of an artificial price and 

holding that a charge of manipulation can be sustained where respondents' acts are a proximate 

cause of the artificial price). 

Here, ICAP brokers communicated on a daily basis with banks that participated on the 

Yen LIB OR panel and made submissions that purported to reflect their assessments of their 

respective banks' costs of borrowing unsecured funds in the London interbank market for Yen 

across tenors. The official LIBOR fixings are calculated using a trimmed average methodology 

applied to the rates submitted by the panel banks. By virtue of this methodology, panel banks 

had the ability to influence or affect the rate that would become the official Yen LIB OR fixing 

for any tenor. Accordingly, if the ICAP brokers could influence the rates submitted by the panel 

banks, then the ICAP brokers had the ability to influence or affect the rate at which Yen LIB OR 

would be fixed. As evidenced above, Yen LIB OR panel banks relied upon the market 

information about Yen borrowing rates and Suggested LIBORs provided by ICAP Yen brokers, 

and, at times, at least certain panel banks used the rates suggested the ICAP Yen brokers in 

determining and making their submissions. As a result, at times, certain Yen LIB OR panel 

banks made false or misleading Yen LIB OR submissions. 

42 
As evidenced by the extensive communications and other facts set fmih above, in causing 

certain panel banks at times to make false or misleading Yen LIBOR submissions, ICAP brokers 

specifically intended to affect the daily Yen LIB OR fixing for certain tenors, including onemonth, three-month, and six-month. Their intent is also evidenced by their motivation to lure 

and keep the significant business of the Senior Yen Trader and other derivatives traders by 

making extensive efforts to ensure that Yen LIBOR fixed at rates that benefited their clients' 

derivatives trading positions. 

As a result ofiCAP brokers' influence on the rates submitted by panel banks, at times 

some ofthe panel banks made Yen LIBOR submissions, whether knowingly or not, that did not 

reflect their banlc' s costs of borrowing unsecured funds in the London Yen interbanlc market but 

instead reflected rates beneficial to the trading positions of the Senior Yen Trader and other 

traders. Accordingly, through ICAP brokers' actions, those Yen LIBOR submissions acted as 

illegitimate factors in the pricing ofthe daily Yen LIBOR fixings for certain tenors with the 

result that the official Yen LIBOR for certain tenors were artificial on certain occasions. Thus, 

the ICAP brokers' actions were a proximate cause of the artificial Yen LIBOR fixings. 

Accordingly, on certain occasions, ICAP, through the acts of certain brokers and a desk 

manager, manipulated Yen LIB OR for ce1iain tenors, a commodity in interstate commerce, in 

violation of Sections 6( c), 6( d) and 9( a)(2) of the Act. 

C. ICAP Attempted to Manipulate Yen LIBOR 

To prove attempted manipulation, two elements are required: (1) an intent to affect the 

market price; and (2) an ove1i act in furtherance of that intent. See In re Hohenberg Bros. Co., 

~ 20,271 at 21,477 (CFTC Feb. 18, 1977); CFTC v. Bradley, 408 F. Supp. 2d 1214, 1220 (N.D. 

Okla. 2005). The intent standard is the same as that for manipulation. See Indiana Farm Bureau 

and Hohenberg Bros., supra. 

As evidenced and found above, certain ICAP Yen brokers each specifically intended to 

affect the rate at which the daily LIB OR for Yen would be fixed to benefit the derivatives trading 

positions of traders at panel banlcs, particularly the Senior Yen Trader at UB S. Each instance of 

the following constitutes overt acts in fmiherance of ICAP' s Yen brokers' intent to affect the 

Yen LIBOR fixings: (1) the ICAP brokers' coordination with derivatives traders at certain panel 

banks, pmiicularly the Senior Yen Trader; (2) the ICAP brokers' internal coordination about 

rates that would be beneficial to the traders' derivatives trading positions; (3) the ICAP brokers' 

dissemination of false and misleading Suggested LIBORs skewed to reflect rates beneficial to 

traders' derivatives trading positions; and (4) the ICAP brokers' direct contacts with submitters 

and traders at certain panel banks to try to influence their LIBOR submissions. Accordingly, 

ICAP engaged in repeated acts of attempted manipulation in violation of Sections 6(c), 6(d) and 

9(a)(2) ofthe Act, 7 U.S.C. §§ 9, 13b and 13(a)(2) (2006). 

43 
D. ICAP Aided and Abetted the Attempts of Derivatives Traders to Cause False or 

Misleading Yen LIBOR Submissions to be Made and to Manipulate Yen LIBOR 

Pursuant to Section 13(a) of the Act, ICAP aided and abetted the attempts of derivatives 

traders at Yen LIB OR panel banks to manipulate Yen LIB OR in violation of the Act, particularly 

the Senior Yen Trader. 7 U.S.C. § 13c(a) (2006). Liability as an aider and abettor requires proof 

that: (1) the Act was violated; (2) the aider and abettor had knowledge of the wrongdoing 

underlying the violation; and (3) the aider and abettor intentionally assisted the primary 

wrongdoer. See In re Nikkhah, [1999-2000 Transfer Binder] Comm. Fut. L. Rep. (CCH) 

~ 28,129 at 49,888 n.28 (CFTC May 12, 2000). Although actual knowledge ofthe primary 

wrongdoer's conduct is required, knowledge of the unlawfulness of such conduct need not be 

demonstrated. See In re Lincolnwood Commodities, Inc., [1982-1984 Transfer Binder] Comm. 

Fut. L. Rep. (CCH) ~ 21,986 at 28,255 (CFTC Jan. 31, 1984). Knowing assistance can be 

inferred from the surrounding facts and circumstances. Id. 

As evidenced by the extensive communications, certain ICAP Yen brokers often 

coordinated with and assisted derivatives traders at Yen LIBOR panel banks, primarily the 

Senior Yen Trader at UBS, to manipulate the official Yen LIB OR fixings for certain tenors by 

attempting to cause and at times causing panel banks to make Yen LIBOR submissions at rates 

or levels that that would benefit the derivatives traders' trading positions. The ICAP brokers 

knew that the Senior Yen Trader and other traders were trying to manipulate Yen LIB OR to 

benefit their derivatives trading positions. 

UBS, through the acts ofthe Senior Yen Trader, and other panel banks through acts of 

their derivatives traders, in coordination with ICAP brokers, attempted to manipulate Yen 

LIBOR, at times successfully, in violation of Sections 6(c), 6(d) and 9(a)(2) of the Act, 7 U.S.C. 

§§ 9, 13b and 13(a)(2) (2006). Certain ICAP brokers had knowledge of, and intentionally and 

often assisted, the attempts of the Senior Yen Trader and traders at the other banks to manipulate 

the rate at which Yen LIBOR was fixed, at times successfully. Accordingly, ICAP, through the 

acts of ce1iain brokers and a desk manager, aided and abetted the attempts of traders at panel 

banks to manipulate Yen LIB OR, at times successfully, in violation of Sections 6( c), 6( d) and 

9(a)(2) ofthe Act, 7 U.S.C. §§ 9, 13b and 13(a)(2) (2006). 

E. ICAP is Liable for the Acts of its Agents 

Section 2(a)(l)(B) ofthe Act, 7 U.S.C. § 2(a)(1)(B) (2006), and Regulation 1.2, 17 

C.F .R. § 1.2 (20 12) provide that the act, omission, or failure of any official, agent or other person 

acting for any individual, association, partnership, corporation or trust within the scope of his 

employment or office shall be deemed the act, omission or failure of such individual, association, 

partnership, corporation or tlust. Pursuant to Section 2(a)(l)(B) of the CEA and Commission 

Regulation 1 .2, strict liability is imposed on principals for the actions of their agents. See, e.g., 

Rosenthal & Co. v. CFTC, 802 F.2d 963, 966 (7thCir. 1986); Dohmen-Ramirez & Wellington 

Advisory, Inc. v. CFTC, 837 F.2d 847, 857-58 (9th Cir. 1988). 

ICAP is liable for the acts, omissions and failures of the brokers and managers who acted 

as their employees and/or agents in the conduct described above. Accordingly, ICAP violated 

44 
Sections 6(c), 6(d) and 9(a)(2) ofthe Act, 7 U.S.C. §§ 9, 13b and 13(a)(2) (2006), as set forth 

above. 

v. 

FINDINGS OF VIOLATIONS 

Based on the foregoing, the Commission finds that Respondent violated Sections 6( c), 

6(d) and 9(a)(2) ofthe Act, 7 U.S.C. §§ 9, 13b and 13(a)(2) (2006). 

VI. 

OFFER OF SETTLEMENT 

Respondent, without admitting or denying the findings or conclusions herein, except to 

the extent Respondent admits those findings in any related action against ICAP by, or any 

agreement with, the Depmiment of Justice or any other governmental agency or office, have 

submitted the Offer in which Respondent: 

A. Acknowledges receipt of service of this Order; 

B. Admits the jurisdiction of the Commission with respect to all matters set f01ih in this 

Order and for any action or proceeding brought or authorized by the Commission based 

on violation of or enforcement of this Order; 

C. Waives: 

1. the filing and service of a complaint and notice of hearing; 

2. a hearing; 

3. all post-hearing procedures; 

4. judicial review by any court; 

5. any and all objections to the participation by any member ofthe Commission's 

staff in the Commission's consideration of the Offer; 

6. any and all claims that Respondent may possess under the Equal Access to Justice 

Act, 5 U.S.C. § 504 (2006) and 28 U.S.C. § 2412 (2006), and/or the rules 

promulgated by the Commission in conformity therewith, Pmi 148 of the 

Commission's Regulations, 17 C.F.R. §§ 148.1-30 (2012), relating to, or arising 

from, this proceeding; 

7. any and all claims that Respondent may possess under the Small Business 

Regulatory Enforcement Fairness Act of 1996, Pub. L. No. 104-121, §§ 201-253, 

45 
110 Stat. 847, 857-868 (1996), as amended by Pub. L. No. 110-28, § 8302, 121 

Stat. 112, 204-205 (2007), relating to, or arising from, this proceeding; and 

8. any claims of Double Jeopardy based on the institution of this proceeding or the 

entry in this proceeding of any order imposing a civil monetary penalty or any 

other relief; 

D. Stipulates that the record basis on which this Order is entered shall consist solely of the 

findings contained in this Order to which Respondent has consented in the Offer; and 

E. Consents, solely on the basis of the Offer, to the Commission's entry of this Order that: 

1. makes findings by the Commission that Respondent violated Section 6( c), 6( d) 

and 9(a)(2) ofthe Act, 7 U.S.C. §§ 9, 13b and 13(a)(2) (2006); 

2. orders Respondent to cease and desist from violating Sections 6( c), 6( d) and 

9(a)(2) ofthe Act, 7 U.S.C. §§ 9, 13b and 13(a)(2) (2006 & Supp. V 2012); 

3. orders Respondent to pay a civil monetary penalty in the amount of $65,000,000, 

plus post-judgment interest; and 

4. orders Respondent and ICAP plc and their successors and assigns to comply with 

the conditions and unde1iakings consented to in the Offer and as set forth in Part 

VII of this Order. 

Upon consideration, the Commission has determined to accept the Offer. 

VII. 

ORDER 

Accordingly, IT IS HEREBY ORDERED THAT: 

A. Respondent shall cease and desist from violating Sections 6(c), 6(d) and 9(a)(2) of the 

Act, 7 U.S.C. §§ 9, 13b and 13(a)(2) (2006 & Supp. V 2012). 

B. Respondent shall pay a civil monetary penalty of Sixty-Five Million U.S. Dollars 

($65,000,000), within ten (10) days of the date of entry of this Order (the "CMP 

Obligation"). If the CMP Obligation is not paid in full within ten (10) days of the date of 

entry of this Order, then post-judgment interest shall accrue on the CMP Obligation 

beginning on the date of entry of this Order and shall be determined by using the 

Treasury Bill rate prevailing on the date of entry of this Order pursuant to 28 U.S.C. 

§ 1961 (2006). Respondent shall pay the CMP Obligation by electronic funds transfer, 

U.S. postal money order, certified check, banlc cashier's check, or bank money order. If 

payment is to be made other than by electronic funds transfer, then the payment shall be 

made payable to the Commodity Futures Trading Commission and sent to the address 

below: 

46 
Commodity Futures Trading Commission 

Division of Enforcement 

ATTN: Accounts Receivables--- AMZ 340 

E-mail Box: 9-AMC-AMZ-AR-CFTC 

DOT IF AA/MMAC 

6500 S. MacA1ihur Blvd. 

Oklahoma City, OK 73169 

Telephone: ( 405) 954-5644 

If payment is to be made by electronic funds transfer, Respondent shall contact Linda 

Zurhorst or her successor at the above address to receive payment instructions and shall 

fully comply with those instructions. Respondent shall accompany payment of the CMP 

Obligation with a cover letter that identifies Respondent and the name and docket number 

of this proceeding. Respondent shall simultaneously transmit copies of the cover letter 

and the form of payment to the Chief Financial Officer, Commodity Futures Trading 

Commission, Three Lafayette Centre, 1155 21st Street, NW, Washington, D.C. 20581. 

C. ICAP plc, Resfondent and their successors and assigns (collectively, the "ICAP 

Companies") 1 shall comply with the following conditions and unde1iakings. The ICAP 

Companies represent that they have already undertaken and implemented, or are 

implementing certain compliance and supervismy controls or enhancements consistent 

with the Undertakings. 

1. Marl\:.et Publications- Policies, Procedures and Controls: 

a. The ICAP Companies shall institute, implement and/or strengthen compliance 

and supervisory policies, procedures and internal controls designed to ensure 

the integrity of the ICAP Companies' Market Publications, and to detect, deter 

and prevent the dissemination of false or misleading market information 

contained therein. "Market Publication" means: (1) a written communication 

distributed via any media; (2) that includes predictions, suggestions or 

14 ICAP plc, a company registered in the United Kingdom, is a holding company which is the parent of 

numerous subsidiaries that are the world's largest interdealer brokers and providers of post-trade risk and 

information services. Its subsidiaries are active in the wholesale markets in interest rates, credit, 

commodities, foreign exchange, emerging markets, equities and equity derivatives. ICAP plc is 

headquatiered in London and its subsidiaries maintain offices in London, New York, Jersey City, and 

Tokyo, along with other offices in more than 32 countries. ICAP plc is not registered with the 

Commission in any capacity. 

As ICAP plc sets the policies, procedures and controls, including the code of conduct, that apply to all 

ICAP pic subsidiaries, ICAP plc represents that it shall ensure that all subsidiaries more than fifty percent 

owned by ICAP plc that issue Market Publications (as defined herein) and/or have cash deposit desks for 

the Group of Eight ("G8") currencies and any LIB OR currency, including, but not limited to, the 

Respondent, i.e., the ICAP Companies, shall comply with these Undetiakings. 

47 
opinions regarding the levels at which a Benchmark Interest Rate 15 will set; 

and (3) that is published on a regular basis and is distributed to more than one 

customer. 

b. Such Policies, Procedures and Controls shall provide that each provision of 

Market Publications shall be based on upon a rigorous and honest assessment 

of market data and information, and shall not be influenced by internal or 

external conflicts of interest or any other illegitimate factors. 

c. Policies, Procedures and Controls relating to Market Publications shall include 

or provide for the following: 

1. That Market Publications shall be based on all definitions, rules and 

guidance applicable to the relevant Benchmark Interest Rate as 

provided by the Benchmark Publisher; 

11. That Market Publications shall be based on transactions, bids and 

offers, market sentiment, indications of interest, and other relevant 

market activity information available to the ICAP Companies in the 

markets relevant to Benchmark Interest Rates. An Author's reliance 

on and utilization of subjective market activity information should be 

limited only to information that the Author16 reasonably and in good 

faith believes contributes to the accuracy of any predictions, 

suggestions, or opinions regarding the levels at which a Benchmark 

Interest Rate will set as contained in the Market Publication; 

111. A description of the types of market circumstances that require the use 

of models, correlated market data or related trading instruments in 

making Market Publications; 

IV. The contemporaneous documentation, including recording the basis 

for, Market Publications, and retention of the same; 

15 The following terms are defined as follows: 

Benchmark Interest Rate: An interest rate for a currency and maturity/tenor that is calculated based 

on data received from market participants and published to the market on a regular, periodic basis, 

such as LIBOR and Euribor; 

Benchmark Publisher: A banking association or other entity that is responsible for or oversees the 

calculation and publication of a Benchmark Interest Rate; and 

Submission(s): The interest rate(s) submitted for each currency and maturity/tenor to a Benchmark 

Publisher. For example, if a panel bank submits a rate for one-month and three-month U.S. Dollar 

LIBOR, this would constitute two Submissions. 

16 For the purposes of these Undetiakings, the term "Author" means any individual within the ICAP 

Companies who is responsible for the content of Market Publications. 

48 
v. The review and approval of Market Publications by a supervisor prior 

to dissemination; 

Vl. The inclusion of a supervisor and a representative from the compliance 

department as an identified recipient on any written Market 

Publications disseminated; 

vn. The disclosure of the following information for Market Publications 

disseminated shall include at least the following: 

1) A statement that any Market Publication represents the 

predictions, suggestions, opinions or assessments of the Author 

based on market data and market activity information; 

2) Identification of the source(s) of information or data upon 

which the Market Publication is based; and 

3) As appropriate, identification of the use of any models, 

correlated markets or related trading instruments in the 

formation of the Market Publications; 

vm. Internal controls regarding other improper communications related to 

Market Publications: 

1) Such controls shall be designed to detect, deter and prevent 

improper communications between and among employees, 

agents and supervisors of the ICAP Companies, or with any 

outside party, and to ensure the integrity and reliability of the 

Market Publications; 

2) For these purposes, improper communications shall include, at 

a minimum: (1) any attempt to improperly influence the 

content of or alter the views contained in Market Publications; 

(2) using Market Publications for the benefit of any third 

party's trading position; or (3) any attempt to influence or 

affect any panel bank's Submission. For example, Market 

Publications shall not include, and employees, agents and 

supervisors ofthe ICAP Companies shall not disclose, a bank's 

proposed Submissions to other market participants; and 

1x. The periodic but routine review of electronic communications and 

audio recordings of or relating to the Market Publications and other 

related communications between and among employees, agents and 

supervisors of the ICAP Companies, or with any outside party. 

49 
2. Other Market Communications -Policies, Procedures and Controls: 

a. The ICAP Companies shall institute, implement and/or strengthen compliance 

and supervisory policies, procedures and internal controls designed to ensure 

the integrity of the ICAP Companies' Other Market Communications, 

including provisions for supervision, monitoring, auditing, training and 

reporting. 

b. Other Market Communications shall include, but are not limited to: (1) 

predictions, suggestions or opinions regarding the levels of Benchmark 

Interest Rates communicated orally; (2) predictions, suggestions or opinions 

regarding the levels of pricing in cash deposit markets related to and 

derivatives markets based on Benchmark Interest Rates in G8 currencies and 

any LIBOR currency; and (3) communications concerning prices of 

transactions, bids or offers in cash deposit markets related to and derivatives 

markets based on Benchmark Interest Rates in G8 currencies and any LIBOR 

currency. 

c. These Policies, Procedures and Controls shall be designed to detect, deter and 

prevent improper communications between and among employees, agents and 

supervisors of the ICAP Companies, or with any outside party, and to ensure 

the integrity and reliability of these Other Market Communications. 

d. For these purposes, improper communications shall include, at a minimum: 

(1) any attempt to improperly influence the content of or alter the views 

contained in Other Market Communications; (2) using Other Market 

Communications improperly for the benefit of any third party's trading 

position; or (3) any attempt to influence or affect any panel bank's 

Submission. For example, Other Market Communications shall not include, 

and employees, agents and supervisors of the ICAP Companies shall not 

disclose, a bank's proposed Submissions to other market pmiicipants. 

3. General Policies, Procedures and Controls: The ICAP Companies shall 

institute, implement and/or strengthen the following general policies, procedures 

and internal controls: 

a. The supervision and management of employees, agents and supervisors of the 

ICAP Companies to ensure compliance with the ICAP Companies' Policies, 

Procedures and Controls, and these Undetiakings; 

b. The procedure(s) for the reporting and investigation of any violations of the 

Undertakings, the ICAP Companies' Policies, Procedures and Controls, or any 

questionable, unusual or unlawful activity concerning the ICAP Companies' 

Market Publications or Other Market Communications, including notification 

to the appropriate compliance or legal personnel and reporting, as necessary, 

to authorities; 

50 
c. The periodic physical presence of compliance personnel on the brokering 

floors where Market Publications are prepared, and/or products that are the 

subject of Market Publications are brokered, and/or cash deposits for G8 

currencies and any LIBOR currency are brokered, and/or derivatives products 

based on Benchmark Interest Rates in G8 currencies and any LIBOR currency 

are brokered, in connection with these Policies, Procedures and Controls, 

which shall be conducted at least monthly for main offices (including London, 

U.K. and New Jersey, U.S.) and at least every six months for branch offices; 

and 

d. The handling of complaints concerning any improper Market Publications and 

improper Other Market Communications by any employee, agent or 

supervisor of the ICAP Companies, including: 

1. Memorializing all such complaints; and 

11. Establishing a review and follow-up by the chief compliance officer(s) 

or a designee of such complaints; and 

111. The reporting of material complaints to the Chief Executive Officer 

and Board of Directors of the relevant I CAP company, relevant selfregulatory organizations, the Commission, and/or other appropriate 

regulators. 

4. Qualifications of Authors and Supervisors: All Authors of Market Publications 

and their supervisors shall: 

a. Have significant experience in the markets that are the subject of his or her 

Market Publication, and/or in cash deposit markets related to and derivatives 

markets based on Benchmark Interest Rates in G8 currencies and any LIBOR 

currency; and 

b. Receive training on the definition, rules and guidance surrounding the 

applicable Benchmark Interest Rate as set by the Benchmark Publisher. 

5. Documentation: The ICAP Companies shall provide the documents set fmih 

below promptly and directly to the Commission upon request, without subpoena 

or other process, regardless of whether the records are held outside of the United 

States, to the extent permitted by law. 

a. Requirement to Document Market Publications: The ICAP Companies shall 

contemporaneously memorialize, and retain in an easily accessible format, for 

a period of five (5) years after the date of each dissemination, the following: 

51 
1. All Market Publications; 

11. The identity of the Authors of the Market Publications disseminated; 

and 

111. The record basis for the Market Publications, including, but not limited 

to, the following: 

1) The relevant market data and information used, including 

specific transactions, offers and bids relied upon by in 

formulating the Market Publications; 

2) The source(s) of the information or data relied upon; 

3) Any models, correlated market data and data for related trading 

instruments used in formulating the Market Publications; and 

4) Any information regarding market events considered in 

formulating the Market Publications, including the specific 

market announcement(s) or event(s) and any effect of such 

market event(s) on transacted rates, offers or bids in the 

relevant markets. 

b. Transaction Records: The ICAP Companies shall retain for a period of five 

(5) years trade transaction records related to the brokering activities in the 

markets that are the subject of Market Publications, and/or in cash deposit 

markets related to and derivatives markets based on Benchmark Interest Rates 

in G8 currencies and any LIBOR currency. The records shall be easily 

accessible and convertible into the Microsoft Excel file format. 

c. Screen Data: Where an ICAP Company maintains a screen that is utilized to 

display to customers bids, offers, and/or transactions in the markets that are 

the subject of Market Publications, and/or in cash deposit markets related to 

and derivatives markets based on Benchmark Interest Rates in G8 currencies 

and any LIBOR currency, the ICAP Companies shall capture and retain for a 

period of five ( 5) years a screen shot of such information at the opening and 

close of the market for such product in the relevant time zone, as well as at the 

time of the deadline for submitting the Benchmark Interest Rate as imposed 

by the Benchmark Publisher. 

d. Requirement to Record Communications: The ICAP Companies shall record 

and retain to the greatest extent practicable: 

1. All communications of employees, agents or supervisors of the ICAP 

Companies who primarily broker products in the markets that are the 

subject of Market Publications, and/or in cash deposit markets related 

52 
to and derivatives markets based on Benchmark Interest Rates in G8 

currencies and any LIBOR currency. 

11. The above communications shall not be conducted in a manner to 

prevent the ICAP Companies from recording such communications. 

111. Audio communications of Authors of Market Publications and their 

supervisors shall be retained for a period of one (1) year. Audio 

communications of other employees, agents or supervisors of ICAP 

Companies who primarily broker products in the markets that are the 

subject of Market Publications, and/or in cash deposit markets related 

to and derivatives markets based on Benchmark Interest Rates in G8 

currencies and any LIBOR currency shall be retained for a period of 

six (6) months. Subject to a reasonable time to implement, the ICAP 

Companies' audio retention requirements pursuant to these 

Undertakings shall commence within a reasonable period after the 

entry of this Order and shall continue for a period of five (5) years 

thereafter. 

tv. All communications except audio communications shall be retained 

for a period of five (5) years. 

v. Nothing in these Undertakings shall limit, restrict or narrow any 

obligations pursuant to the Act or the Commission's Regulations 

promulgated thereunder, including but not limited to Regulations 1.31 

and 1.35, 17 C.P.R. §§ 1.31 and 1.35 (2012), in effect now orin the 

future. 

6. Monitoring and Auditing: 

a. Monitoring: The ICAP Companies shall maintain or develop monitoring 

systems or electronic exception repmiing systems that identify possible 

improper or unsubstantiated Market Publications or related communications 

among employees, agents or supervisors of the ICAP Companies or with any 

outside party. 

1. This monitoring shall include reviews of written communications in 

any media and shall include supervisors. It shall also include reviews 

of oral communications of Authors and their supervisors. 

11. Such reports will be reviewed on at least a monthly basis and if any 

significant issues are identified, then the underlying documentation for 

the Market Publications shall be reviewed to determine whether the 

Market Publications are adequately substantiated. If it is not 

substantiated, the ICAP Companies shall notify their chief compliance 

officer(s). 

53 
b. Periodic Audits: Starting six (6) months from the date of the entry of this 

Order, and continuing every six (6) months thereafter, unless an annual audit 

is scheduled at the same time, the ICAP Companies shall conduct internal 

audits of reasonable, random samples of Market Publications being 

disseminated, the evidence documenting the basis for such Market 

Publications, and the related communications of the Market Publications 

Author in order to verify the integrity and reliability of the Market 

Publications. 

c. Annual Audits By Third Patiy Auditors: Starting one (1) year from the date 

ofthe entry of this Order and continuing annually for four (4) additional years 

thereafter, the ICAP Companies shall retain an independent, third-party 

auditor to conduct an audit of the desks brokering products in the markets that 

are the subject of Market Publications, and/or in cash deposit markets related 

to and derivatives markets based on Benchmark Interest Rates in G8 

currencies and any LIBOR currency, including employees, agents, supervisors 

and managing directors (or similarly situated persons with responsibility for 

desk management or oversight), to ensure they are in compliance with the new 

Policies, Procedures and Controls implemented as a result of these 

Undertakings, and to confirm the adequate supervision of these desks. The 

annual audits shall include, without limitation, the following: 

1. Reviewing the clients of each desk and of the employees, agents or 

supervisors of the desk to determine the most significant corporate and 

individual clients; 

11. Reviewing communications of employees, agents, and supervisors on 

the desks, as well as managing directors (or similarly situated persons 

with responsibility for desk management or oversight). This review 

shall include the communications between and among employees, 

agents and supervisors on the desks and communications with the most 

significant corporate and individual clients of the desk; 

111. Interviewing the employees, agents and supervisors on the desks, to 

the extent they are still employed by the ICAP Companies; 

iv. Reviewing Market Publications being disseminated, the evidence 

documenting the basis for such Market Publications, and the related 

communications of the Market Publications Author; 

v. Obtaining written verification from the employees, agents and 

supervisors on desks, to the extent they are still employed by the ICAP 

Companies, that their Market Publications were consistent with this 

Order, and the ICAP Companies' Policies, Procedures and Controls; 

and 

54 
vi. Providing a written audit report to ICAP plc, Respondent, and the 

Commission (with copies addressed to the Commission's Division of 

Enforcement (the "Division")). 

7. Training: The ICAP Companies shall develop training programs for all 

employees, agents and supervisors who are involved in creating and/or 

disseminating Market Publications. Such employees, agents and supervisors shall 

be provided with preliminary training regarding the Policies, Procedures and 

Controls developed pursuant to these Undetiakings. By no later than February 6, 

2014, all employees, agents and supervisors in the markets that are the subject of 

Market Publications, and/or in cash deposit markets related to and derivatives 

markets based on Benchmark Interest Rates in G8 currencies and any LIBOR 

currency shall be fully trained in the application of these Undertakings to them, as 

set forth herein. Thereafter, such training will be provided promptly to employees 

newly assigned to any of the above listed responsibilities, as part of the ICAP 

Companies' regular training programs. The training shall be based upon the 

individual's position and responsibilities, and as appropriate, address the 

following topics: 

a. The Undertakings set forth herein; 

b. The impropriety of: (1) any attempt to improperly influence the content of and 

alter the views contained in Market Publications or Other Market 

Communications; (2) using Market Publications or Other Market 

Communications improperly for the benefit of any third party's trading 

position; or (3) any attempt to influence or affect any panel bank's 

Submission( s); 

c. The requirement to conduct all business related to Market Publications, and 

cetiain business related to the markets that are the subject of Market 

Publications, and/or cash deposit markets related to and derivatives markets 

based on Benchmark Interest Rates in G8 currencies and any LIB OR 

currency, on the ICAP Companies' recorded telephone and electronic 

communications systems, and not on personal telephones or other electronic 

devices, as set forth in Section 5.iv. of these Undertakings; 

d. The policies and procedures developed and instituted pursuant to these 

Undertakings; and 

e. The employment and other potential regulatory and criminal consequences if 

employees act unlawfully or improperly in connection with these 

Undertakings. 

55 
8. Reports to the Commission: 

a. Compliance with Undertakings: Every four (4) months, stmiing 120 days 

from the entry of this Order, ICAP plc and Respondent shall make interim 

reports to the Commission, through the Division, explaining their progress 

towards compliance with the Undertakings set forth herein. Within 365 days 

of the entry of this Order, ICAP plc and Respondent shall submit a report to 

the Commission, through the Division, explaining how they have complied 

with the Undertakings set forth herein. The report shall attach copies of and 

describe the Policies, Procedures and Controls that have been designed and 

implemented to satisfy the Undertakings. The report shall contain a 

certification from a representative ofiCAP plc's and the Respondent's 

Executive Management, after consultation with the ICAP Companies' chief 

compliance officers, that ICAP plc and Respondent have complied with the 

Undertakings set forth above, and that they have established Policies, 

Procedures and Controls to satisfy the Unde1iakings set forth in this Order; 

b. Compliance with Initial Training: Within two weeks of completing the 

training required in Section 7 of these Undertakings, ICAP plc and 

Respondent shall provide to the Commission, through the Division, written 

affirmation that all employees, agents and supervisors in the markets that are 

the subject of Market Publications, and/or in cash deposit markets related to 

and derivatives markets based on Benchmark Interest Rates in G8 currencies 

and any LIBOR currency have been fully trained in the application of these 

Undertakings to them; and 

c. Disciplinary and Other Actions: ICAP pic and Respondent shall promptly 

report to the Commission, through the Division, all improper conduct related 

to any Market Publication or the attempted manipulation or manipulation of a 

Benchmark Interest Rate, as well as any disciplinary action, or other law 

enforcement or regulatory action related thereto, unless de minimis or 

otherwise prohibited by applicable laws or regulations. 

9. Cooperation with the Commission: 

a. ICAP pic and Respondent shall cooperate fully and expeditiously with the 

Commission, including the Division, and any other governmental agency in 

this action, and in any investigation, civil litigation, or administrative matter 

related to the subject matter of this action or any current or future Commission 

investigation related thereto. As pmi of such cooperation, ICAP plc and 

Respondent agree to the following for a period of five (5) years from the date 

of the entry of this Order, or until all related investigations and litigation are 

concluded, including through the appellate review process, whichever period 

is longer: 

56 
1. Preserve all records relating to the subject matter of this proceeding, 

including, but not limited to, audio files, electronic mail, other 

documented communications, and trading records; 

11. Comply fully, promptly, completely, and truthfully with all inquiries 

and requests for information or documents; 

111. Provide authentication of documents and other evidentiary material; 

IV. Subject to applicable laws and regulations, provide copies of 

documents within ICAP pic and Respondent's possession, custody or 

control; 

v. Subject to applicable laws and regulations, ICAP plc and Respondent 

will make their best efforts to produce any current (as of the time of 

the request) officer, director, employee, or agent ofiCAP pic and 

Respondent, regardless ofthe individual's location, and at such 

location that minimizes Commission travel expenditures, to provide 

assistance at any trial, proceeding, or Commission investigation related 

to the subject matter of this proceeding, including, but not limited to, 

requests for testimony, depositions, and/or interviews, and to 

encourage them to testify completely and truthfully in any such 

proceeding, trial, or investigation; and 

v1. Subject to applicable laws and regulations, ICAP plc and Respondent 

will make their best efforts to assist in locating and contacting any 

prior (as of the time of the request) officer, director, employee or agent 

of ICAP plc and Respondent. 

b. ICAP plc and Respondent also agree that they will not undertake any act that 

would limit their ability to cooperate fully with the Commission. ICAP pic 

and Respondent will designate an agent located in the United States of 

America to receive all requests for information pursuant to these 

Unde1iakings, and shall provide notice regarding the identity of such Agent to 

the Division upon entry of this Order. Should ICAP plc and Respondent seek 

to change the designated agent to receive such requests, notice of such 

intention shall be given to the Division fourteen (14) days before it occurs. 

Any person designated to receive such request shall be located in the United 

States of America. 

10. Prohibited Or Conflicting Undertakings: 

a. Should the Undertakings herein be prohibited by, or be contrary to the 

provisions of any obligations imposed on ICAP pic or Respondent by any 

presently existing, or hereinafter enacted or promulgated laws, regulations and 

regulatory mandates, then ICAP plc and Respondent shall promptly transmit 

57 
notice to the Commission (through the Division) of such prohibition or 

conflict, and shall meet and confer in good faith with the Commission 

(through the Division) to reach an agreement regarding possible modifications 

to the Undertakings herein sufficient to resolve such inconsistent obligations. 

In the interim, ICAP plc and Respondent will abide by the obligations 

imposed by the law, regulations and regulatory mandates. 

b. Nothing in these Undertakings shall limit, restrict or narrow any obligations 

pursuant to the Act or the Commission's Regulations promulgated thereunder, 

including but not limited to Regulations 1.31 and 1.35, 17 C.F.R. §§ 1.31 and 

1.35 (2012), in effect now or in the future. 

11. Public Statements: ICAP plc and Respondent agree that neither they nor any of 

their successors and assigns, agents or employees under their authority or control 

shall take any action or make any public statement denying, directly or indirectly, 

any findings or conclusions in this Order or creating, or tending to create, the 

impression that this Order is without a factual basis; provided, however, that 

nothing in this provision shall affect ICAP plc and Respondent's (i) testimonial 

obligations, or (ii) right to take legal positions in other proceedings to which the 

Commission is not a party. ICAP plc, Respondent and their successors and 

assigns shall undetiake all steps necessary to ensure that all of their agents and/or 

employees under their authority or control understand and comply with this 

agreement. 

The provisions of this Order shall be effective as of this date. 

By the Commission. 

Melissa D. Jurgens 

Secretary of the Commission 

Commodity Futures Trading Commission 

Dated: September 25, 2013 

58