* Says no response from watchdog
* Internal inquiry found no evidence of manipulation
* Underlying 2012 pretax profit down 15 pct
* Full-year dividend up 2 pct
By Tommy Wilkes
LONDON, March 5 Broker Tullett Prebon
has asked Britain's financial regulator to clarify whether it is
being investigated for possible involvement in rigging interest
rates after internal inquiries found no evidence of wrongdoing.
Chief Executive Terry Smith said he had contacted the
Financial Services Authority (FSA) after press reports linked
the firm to the Libor scandal, but the watchdog has so far
declined to say whether the broker is formally under
"No regulatory body has told us we are under investigation,"
Smith told Reuters after Tullett announced its full-year results
"In the light of the press coverage, we did actually contact
them (the FSA) and said ... please you can help us with this,
and they've given us no response to that."
An FSA spokesman declined to comment on Smith's claim.
Documents published by the FSA in its settlements with UBS
and Royal Bank of Scotland for their part in
the rigging of Libor (the London interbank offered rate) point
to the central role some brokers played in the scandal.
Brokers are not involved in the setting of the benchmark
interest rate, but they can act as conduits of information.
In settlements with RBS, global regulators said last month
that so-called "wash trades" - a fake trade used by a bank to
pay brokers through commissions - were frequently used by
derivatives traders at the bank to reward unnamed brokers for
their help in influencing Libor setting by other banks.
Tullett's Smith said that the firm's internal investigations
had found wash trades, including interest rate products, but
that these were a common way for brokers and clients to
remunerate each other and that there was no evidence they were
linked to Libor manipulation.
"We've spent quite a bit of time trawling through messages
between people and trades to see whether there was any pattern
of activity and haven't found any," he said.
"We've got a small number of wash trades. (But) sometimes
people decide they owe us money and they've got no means of
paying us other than a wash trade."
Rival ICAP has said that it found no signs of
telltale wash trades in its own internal investigation.
Tullett has not suspended any of its staff, Smith said.
Meanwhile, Tullett said that a slowdown in its revenues had
continued into this year as tough market conditions eat into
client demand for trading financial products.
The broker, which matches buyers and sellers of currencies,
bonds and swaps, said on Tuesday that revenues for the year to
Dec. 31 came in at 850.8 million pounds ($1.3 billion), down
from 910.2 million pounds a year earlier.
Analysts at Societe Generale had forecast revenues of 865.1
million pounds for 2012.
Underlying pretax profit was down more than 15 percent,
falling to 114.7 million pounds from 136.1 million pounds a year
ago, and it is increasing the full-year dividend by 2 pct to
16.85 pence per share.
Smith said that business had made a "reasonable" start to
this year, with revenues for January and February down 5 percent
year on year, though big moves in currencies such as the yen and
sterling had helped the broker.
Tullett also said that increased regulatory costs in 2013
would offset its action last year to reduce fixed costs.
The chief executive said that less than 5 percent of
eligible staff had taken up an offer, reported by Reuters in
January, to delay their bonus payments until April, which would
have allowed them to benefit from a tax cut for Britain's
Shares in Tullett were up 3.5 percent at 1054 GMT.
Thomson Reuters, parent company of Reuters, has been
calculating and distributing Libor rates for Libor's sponsor,
the British Bankers' Association, since 2005.