Voice and electronic interdealer broker ICAP Securities USA LLC reached a $25 million settlement with the U.S. Securities and Exchange Commission to conclude the regulator’s fraud investigation.
The SEC alleged the US division of the company, which pairs buyers and sellers in over-the-counter markets, posted fictitious trades in 2004 and 2005 on some Treasury brokers’s screens to encourage trading by attracting those brokers’ attention, according to a report by Dow Jones Newswires . The regulator has also charged five brokers from ICAP, as well as two senior executives at the firm for assisting in the “flash” trading fraud, the news service said.
ICAP said it has terminated the employment of two employees on the Mortgage Backed Securities desk for violating the company’s policies and it will appoint an independent consultant to review its policies now that significant changes have been made to its procedures.
The company will not have to admit or deny allegations of trading violations, in accordance with the settlement.
Shares of ICAP fell 46 cents or 3.37% in Friday’s session to close at $13.19 a share.
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