RP Martin

Wrapping up its case, the UK’s Serious Fraud Office accused former ICAP (IAP) brokers Danny Wilkinson, Darrell Read, and Colin Goodman, ex-Tullet Prebon employee Noel Cryan, and ex-RP Martin brokers Terry Farr and James Gilmour of behaving like a “well-oiled machine” as they allegedly helped former Citi (C) and UBS (UBS) trader Tom Hayes manipulate the London interbank offered rate (Libor). The office’s lawyer said that the six men are guilty of conspiracy to defraud.

In addition to purportedly assisting Hayes to Libor’s yen variant by deceiving clients about the market’s conditions, the men are also accused of trying to convince traders at other banks to submit false Libor rates. The prosecution has said that for the ex-brokers alleged wrongdoing, they received hundreds of thousands of pounds in kickbacks. The SFO said that the former traders agreed to to try to manipulate Libor in return for “wash trades,” which are transactions intended to make it look as if a sale and purchase have happened even though there has been no change in ownership.

All of the men have pleaded not guilty, with five of them maintaining that they were never involved in the Libor rigging scam at all. Ex-RP Martin trader Terry Farr is the only one who has admitted that he tried to help Hayes. However, his defense team argued that Farr was not aware that his actions were wrong because he only had a basic understanding of the finance industry and didn’t understand derivatives. Also, Cryan said that he lied when he told Hayes he was helping him manipulate Libor. He claims that he never actually engaged in the wrongdoing alleged. Hayes, who recently succeeded in getting his 14-year prison sentence reduced to 11 years following an appeal, made over $300M for his former employers by rigging Libor.

The U.S. Commodity Futures Trading Commission and Britain’s Financial Conduct Authority are fining R.P. Martin over $2 million for misconduct related to manipulating the London Interbank Offered Rate (Libor). The brokerage firm will pay $1.2M to the CFTC and approximately $1M to the British regulator. The latter said the fine could have been bigger but the financial unit showed that it couldn’t afford to pay more.

Libor helps determine what the borrowing costs are for trillions of dollars in credit cards, loans, and mortgages. According to regulators, the British broker-dealer helped a UBS (UBS) trader manipulate Libor as it was tied to the yen. RP Martin is accused of making misleading recommendations to its own employees. The latter issued the submissions used to establish Libor.

In return for RP Martin’s help, its brokers are said to have accepted over $400,000 in payments through wash trades that were actually just to give commissions to the brokerage firm. RP Martin’s brokers are also accused of turning in cash bids that weren’t real so that this would affect the yen Libor while benefitting the trader from UBS.

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