FCA Bans Former RP Martin Broker Terry Farr over Libor

The UK Financial Conduct Authority (FCA) Financial Conduct Authority (FCA) The Financial Conduct Authority (FCA) is the largest financial regulator for all financial markets in the United Kingdom (UK).The UK regulator is responsible for the conduct of firms authorized under the Financial Services and Markets Act 2000. Moreover, the FCA is also responsible for the regulation of behavior in retail and wholesale financial markets, supervision of the trading infrastructure that supports those markets, and the prudential regulation of firms not regulated by the PRA. Its rol The Financial Conduct Authority (FCA) is the largest financial regulator for all financial markets in the United Kingdom (UK).The UK regulator is responsible for the conduct of firms authorized under the Financial Services and Markets Act 2000. Moreover, the FCA is also responsible for the regulation of behavior in retail and wholesale financial markets, supervision of the trading infrastructure that supports those markets, and the prudential regulation of firms not regulated by the PRA. Its rol Read this Term) has banned a former RP Martin employee from working in the financial industry for submitting false Libor rates at the request of banks traders.

Terry Farr, who was a derivatives trader in Japanese Yen denominated instruments at the City broker, was found to have routinely helped UBS Libor submitters to change the rates they submitted in order to benefit their positions, the FCA said.

In return, Mr. Farr had recklessly entered into wash trades – risk-free deals that effectively cancel each other out – which had no legitimate commercial rationale. The purpose of these trades was to reward Farr who already earned over $300,0000 for Martins from UBS and RBS, which increased the bonus pool available to him and his colleagues.

The misconduct took place between September 2008 and August 2009.

The FCS’s regulator decisions committee found that Farr was aware that he is rigging Libor submissions, the mechanism used to set interest rates, with the aim of benefiting RBS’ trading positions. It added “Mr Farr’s motivation for arranging the wash trades was profit and his own personal financial gain. As a consequence of the wash trades, Martins received unwarranted brokerage of £258,151.09.”

Terry Farr found not guilty

Back in 2016, however, a London jury acquitted Terry Farr and five former brokers of trying to rig the JPY benchmark interest rate, which was a major blow to a yearslong investigation into the Libor rate manipulation.

The other brokers, whose nicknames included “Lord Libor” and “Big Nose,” worked at ICAP Brokers and Tullett Prebon, which were merged later in 2016 under TP ICAP to form the world’s largest interdealer broker. In 2017, the new entity was partially cleared by the Luxembourg-based General Court from allegations it plotted with a cartel in the yen Swaps Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Read this Term markets to rig Libor.

Global regulators, including FCA and its U.S. and Swiss counterparts, have fined banks and brokers around $9.0 billion and charged about 30 people in a global inquiry into how banks set rates such as Libor, which determine the rates on trillions of loans and financial contracts globally.