* Former RP Martin brokers charged, due in court Friday
* Follows SFO charging former UBS, Citi trader Hayes
* Interdealer brokers under scrutiny for middlemen role
By Steve Slater and Tommy Wilkes
LONDON, July 15 Britain's fraud prosecutor on
Monday charged two former brokers at interdealer broker RP
Martin with rigging Libor benchmark interest rates, broadening
the scope of the investigation into the scandal beyond big
The Serious Fraud Office (SFO) said it had charged Terry
Farr and James Gilmour with conspiracy to defraud, seven months
after arresting them. They are the first staff from a broking
firm charged in connection with the Libor investigation in
The two were arrested just before Christmas along with
former UBS and Citigroup trader Tom Hayes, who
was last month charged with eight counts of conspiracy to
defraud as the SFO laid the groundwork for what could be the
first Libor trial.
A central cog in the world financial system, the London
interbank offered rate (Libor) is used as a reference for more
than $550 trillion in contracts ranging from complex derivatives
to everyday credit card bills.
Trust in the benchmark was shaken by revelations last year
that traders had routinely manipulated it, prompting a series of
investigations by regulators and other authorities.
Britain's Barclays and Royal Bank of Scotland
and Switzerland's UBS have been fined by U.S. and UK
authorities for manipulating Libor, and more banks and
individuals are under investigation.
The charges against Farr and Gilmour will increase scrutiny
of the role played in the scandal by interdealer brokers, who
act as middlemen between the buyers and sellers of financial
securities such as bonds, currencies or interest rate swaps.
In its settlement in December, UBS admitted that its traders
paid bribes to brokers in return for their help rigging interest
rates. The payments to unnamed brokers ran at 15,000 pounds
($22,700) per quarter.
Farr, 41, and Gilmour, 48, will appear before Westminster
Magistrates' Court on Friday for a preliminary hearing, the SFO
said. Farr has been charged with two counts of conspiracy to
defraud and Gilmour with one count.
RP Martin declined to comment.
Lawyers for Farr and Gilmour did not immediately respond to
requests for comment.
Former UBS and Citi trader Hayes has not yet submitted a
plea. He is expected to appear back in court in October. British
prosecutors say they have extensive evidence against him.
Britain's SFO was granted an extra 3.5 million pounds to
investigate Libor last year and expects to get more than that
this year. It has doubled its investigation team to 60.
David Green, who overhauled the SFO after taking over in
April 2012, is under pressure to show results after the SFO's
future was cast into doubt last year because of mixed success in
Interdealer brokers, who quote prices for buying and selling
bonds, currencies or swaps, speak to traders at banks daily,
giving them a unique and privileged view of banks' trading.
RP Martin, a UK-based broker with offices in Europe,
America, Africa and Asia, is much smaller than rivals such as
ICAP and Tullett Prebon.
RP Martin, which can trace its history back more than 100
years, is one of the oldest money broking businesses in the
world, according to its website. It is known for specialising in
trading foreign currencies and was considered a big player in
the Swiss Franc market in the past.
Its chief executive, David Caplin, and Alan Farnan, a
director at the firm, have left RP Martin, a source familiar
with the matter said on Monday. According to the Financial
Conduct Authority's register the two were no longer active from
May 14. Caplin and Farnan were not immediately available for
Last month, British prosecutors alleged in court that Hayes
conspired with employees from at least 10 financial institutions
including brokers RP Martin, ICAP and Tullett Prebon, as well as
a number of banks, to manipulate rates.
ICAP declined to comment on Monday. It has said previously
that one of its global broking subsidiaries has been formally
notified that it is the subject of a Financial Conduct Authority
investigation. It has suspended one employee and three remain on
Tullett has said it is cooperating with UK authorities, and
that it has not been informed that it or its brokers are under