British broker ICAP unit faces Libor probe

British brokerage ICAP on Thursday said that one of its subsidiaries was being investigated in relation to the Libor rate-rigging scandal. A British watchdog, the Financial Services Authority, was probing the ICAP unit, the broker said in a statement in response to press speculation and after having already confirmed that it was co-operating with Libor-related inquiries. "As part of the FSA's inquiries, one of ICAP's interdealer broker subsidiaries has been notified that it is the subject of an FSA investigation," ICAP said in a statement on Thursday. "The investigation is confidential, accordingly no further comment will be made at this stage." The Financial Times on Thursday said ICAP was being investigated for possible breaches of market conduct rules. The Libor affair erupted in June when Britain's Barclays bank was fined £290 million ($459 million, 344 million euros) by British and US regulators for attempted manipulation of Libor and Euribor interbank rates between 2005 and 2009. That sparked the resignations of three Barclays senior board members, including ex-chief executive Bob Diamond. The Libor system was found to be open to abuse, with some traders lying about borrowing costs to boost trading positions or make their bank seem more secure. The FSA, along with US and Swiss regulators, recently fined Swiss bank UBS $1.5 billion (1.12 billion euros) in connection with the scandal, while the FSA is also investigating Britain's bailed-out lender Royal Bank of Scotland.