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Libor Scrutiny Turns to Middlemen

"U.S. regulators are widening their probe of global interest-rate-rigging by scrutinizing what they claim is a pivotal role of two U.K. brokerage firms in the scandal, people close to the investigation say.

"The Justice Department and Commodity Futures Trading Commission are examining ICAP PLC and R.P. Martin Holdings Ltd., so-called interdealer brokers that are go-betweens for banks seeking buyers or sellers for hard-to-trade assets.

"The brokers, both with headquarters in London, also help some banks decide their submissions for the London interbank offered rate, or Libor, and other benchmarks that underpin trillions of dollars in mortgages and other financial contracts.

"While neither firm has been accused of wrongdoing, regulators allege that some of their employees were crucial in helping specific traders rig submissions by banks of estimated borrowing costs in different currencies."


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