RPT-UPDATE 1-FINRA fines ICAP unit, suspends former broker

(Repeats to additional subscribers with no changes to text)

* FINRA fines ICAP unit, former broker due to improper conduct

* ICAP Corporates LLC fined $2.8 mln

* Broker Jennifer Joan James fined $350,000

By Supantha Mukherjee

BANGALORE, June 30 (Reuters) - ICAP Corporates LLC, a unit of ICAP Plc (IAP.L), the world's biggest interdealer broker, and one of its former brokers were fined more than $3 million by the Financial Industry Regulatory Authority (FINRA) for attempting to "improperly influence" other interdealer brokerage firms and their employees.

The broker, Jennifer Joan James, made "numerous improper communications" with other interdealer brokerage firms about customers proposed brokerage rate reductions in the wholesale credit default swap (CDS) market, FINRA said in a statement.

James, currently a senior vice president and broker at BGC Partners Inc (BGCP.O), was fined $350,000 and suspended from working in the securities industry in all capacities for six months, the independent regulator said.

ICAP was fined $1.8 million for its supervisory failures and $1 million for engaging in conduct through its CDS desk manager that was designed to improperly influence other firms and their employees, FINRA said.

An ICAP spokesman said, "The conduct described by FINRA occurred several years ago. ICAP cooperated with FINRA in its inquiry, and without admitting or denying findings, entered into an AWC (letter of Acceptance, Waiver and Consent) with FINRA to settle the matter."

FINRA's investigation is now closed as to ICAP, the spokesman said in an email.

James could not be immediately reached by Reuters for comment.

FINRA said ICAP and James settled these matters without admitting or denying the allegations, but consented to the entry of FINRAs findings.

FINRAs investigation into misconduct by the other interdealer brokerage firms and individuals involved is continuing, the regulator, which oversees nearly 4,900 brokerages, said.

BGC Partners said in a statement that it "was never involved in FINRAs investigation." It defended James, saying she "acted at the direction, and with the knowledge, of her then-employer, ICAP."

CDS function as insurance that bond buyers purchase to protect themselves against a default. The contracts have been denounced for the role they played in spreading the risks of bad mortgages and other assets. (Editing by Ratul Ray Chaudhuri)