IAP.L Regulatory News (IAP)

18 Dec 2009 17:42



ICAP Securities USA LLC announces settlement with SEC 

New York 18 December 2009. ICAP Securities USA LLC, a US subsidiary of ICAP plc, announced today that it has agreed to a settlement with the United States Securities and Exchange Commission (SEC), with regard to an industry wide investigation into the markets in certain fixed income securities, without admitting or denying allegations of any wrongdoing.  

This concludes a four year investigation during which ICAP Securities cooperated fully with the SEC. 

The settlement included the concept of non-intentional fraud, as the result of 5 of ICAP Securities USA LLC's off-the-run US Treasury voice brokers posting "flash" trades between 2004 and 2005.

It concerned certain activities on ICAP Securities' interdealer voice broking Mortgage Backed Securities desk between 2005 and 2008. ICAP suspended two individuals on the Mortgage Backed Securities desk in June 2008 and subsequently terminated their employment for violation of ICAP policies.

Substantial enhancements to the quality of its control environment have been made by ICAP Securities over the period. These include greater formalization of its broking practices, enhanced operational, risk and compliance controls, improved training and monitoring programs, revised policies and procedures, and the hiring of additional experienced managers in various support roles. 

ICAP remains committed to maintaining the highest professional standards and to providing its customers with the highest quality service. ICAP has concluded that it is in the best interests of the company and its shareholders to resolve this matter without litigation.  ICAP Securities has agreed to pay the SEC disgorgement of $1 million and a penalty of $24 million. This will be treated as an exceptional item in ICAP plc's financial statements.  

ICAP Securities has also agreed with the SEC that ICAP Securities will appoint an independent consultant to review the improved control environment that is now in place.

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About ICAP

ICAP is the world's premier interdealer broker and supplier of post-trade services. The Group is active in the wholesale markets in interest rates, credit, commodities, foreign exchange and equity derivatives. ICAP plc was added to the FTSE 100 Index on 30 June 2006. For more information go to www.icap.com.