Icap to pay $25 million in SEC fraud charges settlement

Icap PLC is known as the U.S. subsidiary of the London inter-dealer broker. By paying $25 million in penalties, the company has settled the fraud charges brought by the U.S. Securities and Exchange Commission.

Icap matches Buyers and Sellers for securities

The SEC said that in the over-the-counter markets Icap Securities USA matches buyers and sellers for securities like U.S. Treasury bonds and mortgage-backed securities via customer trading screens.

Fictitious flash trades displayed by Icap brokers on Icap Screens

In a Friday statement, it has been said by the SEC that Icap brokers on its U.S. Treasury desks displayed fictitious flash trades, that are also known as ‘bird’ trades, on Icap’s screens and they have disseminated false trade information into the marketplace in order to attract customer attention to its screens and encourage actual trading by these customers.

The company would pay $24 million in penalties

Icap neither admitted nor denied the SEC’s allegations. The company has been agreed to disgorge $1 million and they will pay $24 million in penalties. The SEC said that the company has also agreed to retain a consultant who will review its controls and compliance mechanisms and assess its trading activities in order to make sure that such violations aren’t occurring elsewhere within the company.

It has been said by the company that in its financial statements it would report the $25 million penalty as a special item.

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