RP Martin to be fined for role in Libor scandal - source

Tue May 13, 2014 5:08pm EDT

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May 13 (Reuters) - RP Martin, the British interdealer broker, will be fined about 1 million pounds ($1.68 million) after it agreed to a settlement with the Financial Conduct Authority (FCA) for its role in the manipulation of crucial interbank borrowing rates, a source with knowledge of the matter told Reuters.

The brokerage house was spared a larger penalty because a larger fine would leave the group unable to remain in business according to Sky news, which reported the story earlier.

The fine imposed by the FCA is expected to announced later this week and would be by far the smallest levied on any of the firms so far found culpable in the Libor-rigging conspiracy.

The British interdealer broker had become involved in the Libor fixing investigation after two of its employees were arrested in December 2012.

Even though the two brokers arrested were later released, he firm suspended its chief executive and a director in May 2013.

Interdealer brokers had become the focus for investigations by authorities probing the alleged fixing of Libor rates because of the role they play in matching buyers and sellers of securities, for which they charge a fee.

Prosecutors and regulators across Europe, the United States, Canada and Japan had been investigating how traders attempted to rig key interbank lending rates such as Libor, the London interbank offered rate, which is used as the basis for pricing trillions of dollars of financial contracts ranging from complex derivatives to home loans.

The FCA and RP Martin declined to comment. ($1 = 0.5939 British Pounds) (Reporting by Tasim Zahid in Bangalore and Huw Jones in London; Editing by Alden Bentley)

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