New York Judge Dismisses ICAP from US Libor Class Action

NEX Group, which is the company that was formed after ICAP plc sold off its voice broking business, has been cleared of wrongdoing in a class action case in the US. The company announced that the firm’s subsidiaries ICAP and ICAP Europe Limited have been dropped from the legislation.

A number of investors claimed that the firm adversely impacted their trades by using a practice called ‘spoofing’ when the interbank market was setting Euro Interbank Offered Rate (Eurobor) rates.

The practice of ‘spoofing’ is widely viewed as a big problem in algorithmic trading. An algo can quickly create orders that impact market prices without the sender having the intention of execute any of the orders.

Back in November, British trader Navinder Sarao has admitted to using the practice to manipulate market prices during the 2010 ‘Flash Crash Flash Crash The Flash Crash was a major stock market crash that happened on May 6, 2010 in which three major US indices crashed in the span of 36 minutes.In particular, the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite fell nearly 9% before rebounding within minutes. The event differed from other crashes in that most losses were recovered.The crash was believed to be caused in part by Navinder Singh Sarao, a British financial trader. Sarao was later charged with spoofing algorithms, utilized j The Flash Crash was a major stock market crash that happened on May 6, 2010 in which three major US indices crashed in the span of 36 minutes.In particular, the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite fell nearly 9% before rebounding within minutes. The event differed from other crashes in that most losses were recovered.The crash was believed to be caused in part by Navinder Singh Sarao, a British financial trader. Sarao was later charged with spoofing algorithms, utilized j Read this Term’ episode. On the 6th of May, the trader used the practice while trading the S&P 500 index futures.

Eurobor Ruling Coincides with JPY and USD Libor Libor Libor stands for London Inter-bank offered rate. It is an industry-specific term which most of us would never have heard of until the "Libor scandal" became popularized in 2012. Libor is considered to be one of the most important interest rates in finance, upon which trillions of financial contracts rest. The Libor rate effects over $800,000,000,000,000 in financial deals. Banks simply cannot lend money to one another whenever they like as there is a system in place. Every day a group of leading Libor stands for London Inter-bank offered rate. It is an industry-specific term which most of us would never have heard of until the "Libor scandal" became popularized in 2012. Libor is considered to be one of the most important interest rates in finance, upon which trillions of financial contracts rest. The Libor rate effects over $800,000,000,000,000 in financial deals. Banks simply cannot lend money to one another whenever they like as there is a system in place. Every day a group of leading Read this Term

The judge appointed on the case states that the various investors who alleged manipulation of the Euribor did not submit enough evidence against the firm.

According to the court’s order, the complaint against ICAP fails to allege that ICAP actually undertook action to spoof Euribor submitters. The document also states that the plaintiffs failed to allege any United States connection to the alleged communications.

The news is consistent with other cases pertaining to yen Libor and US dollar Libor rate allegations that have shown no personal jurisdiction over ICAP entities.

The liability for ICAP plc resided with NEX Group plc, as did that of ICAP Europe Limited under the terms of the recently completed transaction with Tullett Prebon.