http://www.marketwatch.com/story/icap-pays-25-mln-to-settle-sec-charges-2009-12-20?siteid=YAHOOBThe U.S. subsidiary of the London inter-dealer broker Icap PLC settled fraud charges brought by the U.S. Securities and Exchange Commission by paying $25 million in penalties, the company and agency said.
Icap Securities USA matches buyers and sellers in the over-the-counter markets for securities like U.S. Treasury bonds and mortgage-backed securities via customer trading screens, the SEC said.
In a Friday statement, the SEC said that Icap brokers on its U.S. Treasury desks "displayed fictitious flash trades, also known as 'bird' trades, on Icap's screens and disseminated false trade information into the marketplace
attract customer attention to its screens and encourage actual trading by these customers.
"Icap's customers believed the displayed fake trades to be real and relied on the phony information to make trading decisions."
Icap /quotes/comstock/11i!iaply (IAPL.Y 13.85, +0.40, +2.97%) /quotes/comstock/23s!e:iap (UK:IAP 423.60, +1.27, +0.30%) neither admitted nor denied the SEC's allegations. The company agreed to disgorge $1 million and to pay $24 million in penalties. And Icap agreed to retain a consultant to review its controls and compliance mechanisms and to assess its trading activities to ensure that such violations aren't occurring elsewhere within the company, the SEC said.
Icap said in a statement on Friday that the settlement concludes a four-year investigation by the SEC. The company said it has made " enhancements to the quality of its control environment" and "remains committed to maintaining the highest professional standards and to providing its customers with the highest quality service."
The company said it would report the $25 million penalty as a special item in its financial statements.
Seven current and former executives of Icap also were charged by the SEC and settled the allegations without admitting or denying wrongdoing.