* Says forex trading last month up 22 pct from Jan 2012
* Bond trading up 16 percent
* Forecasts annual profit in line with expectations
* Shares down 1.2 pct, having jumped on Weds to 7-month high
By Luke Jeffs
LONDON, Feb 7 Brokerage ICAP said it had
found no signs of telltale "wash trades" used by banks to reward
brokers for their help rigging interest rates, in the firm's
latest move to distance itself from the Libor scandal.
ICAP Chief Executive Michael Spencer said on Thursday the
British group was conducting an internal probe into possible
interest rate-fixing and was sharing relevant information with
watchdog the Financial Services Authority (FSA).
"We haven't found any wash trades that we've been involved
in," said Spencer, speaking after ICAP - which acts as an
electronic intermediary between the world's largest investment
banks - reported a positive start to the year marked by sharp
upturns in foreign exchange and bond trading.
So-called wash trades, where banks make fake trades to pay
brokers through commissions, have emerged as one of the main
ways in which banks have sought to reward brokers who helped
them fix interest rates.
Global regulators said on Wednesday wash trades were
frequently used by derivatives traders at Royal Bank of Scotland
- fined $612 million for its role in the Libor scandal -
to reward brokers for their help in influencing Libor setting by
ICAP had said on Jan. 24 one of its subsidiaries was the
subject of an FSA investigation over rate fixing and Spencer on
Thursday confirmed one employee had been suspended and another
three put on administrative leave in connection with the probe.
But he said these measures were for actions by individuals
and sought to distance the company from them.
More than a dozen banks and brokerages, including JP Morgan
, Deutsche Bank and Citigroup, are still
being probed over the manipulation of rates such as Libor, or
London interbank offered rate, which is used to price trillions
of dollars of loans.
ICAP does not contribute to the Libor-setting process but
regulators have called into question the role that individual
brokers, at ICAP and rival firms, may have played as conduits to
aid manipulation by traders working at investment banks.
The fine on RBS made it the third global bank to be punished
for rate-fixing. Switzerland's UBS AG agreed in
December to pay penalties of $1.5 billion and Britain's Barclays
paid regulators $453 million last summer.
Spencer's comment on wash trades came as ICAP reported
foreign exchange trading last month was up 22 percent from
January 2012, while bond trading rose 16 percent. The group
forecast annual profit in line with expectations.
By contrast, in the three months through December, currency
and bond trading had fallen 9 percent to a daily average of $664
The brokerage said it expected pretax profit for the year
through March to be within the range of analyst forecasts of
between 280 million pounds ($438.3 million) and 305 million.
"While December was even slower than expected, we've seen a
marked improvement in trading volumes since the beginning of
January across our entire business, although it is premature to
tell if this is the start of a more sustained upturn," said
Shares in the company were down 1.2 percent to 352 pence at
1145 GMT, having jumped on Wednesday to their highest level in
some seven months.