Things Traders Say, ICAP Edition

Curry meals, steaks, Champagne and a Ferrari.

Those were some of the rewards promised to brokers at the financial firm ICAP in exchange for helping to manipulate the benchmark London Interbank Offered Rate, or Libor, according to American and British regulators, which fined the firm a combined $87 million on Wednesday.

The documents released by the authorities on Wednesday include a trove of e-mails and instant messages between brokers and traders that were peppered with colorful language. Many apparently had a taste for the finer things, and some had a penchant for complaining.

The snippets of dialogue reproduced in the legal documents suggest that the brokers and traders spoke openly about giving and receiving bribes, even allowing themselves to boast.

One former broker at ICAP, Colin Goodman, who faces criminal charges by the Justice Department, had a number of nicknames and sometimes used them to sign e-mails. He was known as “Lord Libor” and “Lord Baliff,” according to Justice Department’s complaint. (The back-and-forth includes numerous misspellings, which are left intact.)

In November 2007, another former ICAP broker, Darrell Read, addressed Mr. Goodman by his nickname: “Welcome back M’Lord,” Mr. Read said, according to the Justice Department. Referring to Tom A.W. Hayes a former trader at UBS, Mr. Read continued, “Tom has been like a little lost sheep without you!!”

But even if Mr. Goodman was “Lord Libor,” he collaborated with others, according to the Justice Department. Mr. Read, who also faces criminal charges, sent him an e-mail in October 2006 urging him to try to keep the rate high, the complaint shows.

“Ta mate get your curry order ready will send [someone] round tomorrow,” Mr. Read said, according to the complaint. “If you can get them up there and keep them there tomorrow reckon the trader from UBS Tokyo will come over and buy you a curry himself!”

It wasn’t just curry that apparently whetted the appetite of the ICAP brokers. In December 2007, one derivatives broker added a postscript to his message to a cash broker: “Bubbly on its way with [Senior Yen Trader],” according to the Commodity Futures Trading Commission. (Unlike the Justice Department, the trading commission does not name the individuals in its order.)

“[Senior Yen Trader] will buy you a ferrari next yr if you move 3m up and no change 6m,” the derivatives broker said in a text message in February 2008, referring to three-month and six-month rates, according to the trading commission.

There was also talk of steak. In a conversation with a Royal Bank of Scotland employee who made submissions for the Yen Libor, one ICAP broker focused on sterling-based transactions requested that the rate be influenced downward, according to the trading commission’s order.

“If u cud see ur way to a small drop there might be a steak in it for ya, haha,” the broker said in March 2010, according to the order.

But not all offers were so lavish.

“Yeah just bought him a coffee!” a senior yen trader said in April 2008, according to the trading commission.

“:-D could be the cheapest bribe of your life!” a derivatives broker replied, the order shows.

Though several of the exchanges seem lighthearted, the tone sometimes became more sober, especially when financial rewards were being discussed.

In April 2007, Mr. Goodman sent an e-mail to Daniel Wilkinson, an ICAP employee overseeing yen deals, who was also criminally charged.

“With UBS how much does [Hayes] appreciate the yen libor scoop?” Mr. Goodman wrote, according to the Justice Department, adding, “It seems to me that he has all his glory etc and u guys get his support in other things.”

“I get the dribs and drabs. Life is tough enough over here without having to double guess the libors every morning and get zipper-de-do-da,” Mr. Goodman continued, according to the Justice Department. “How about some form of performance bonus per quarter from your b bonus pool to me for the libor service.”

Mr. Wilkinson responded minutes later, according to the Justice Department: “As for kick backs etc we can discuss that at lunch and I will speak to Tom about it next time he comes up for a chat.”

In another instance, the dialogue apparently became heated. A derivatives broker addressed a junior broker in October 2007, using all capital letters, according to the trading commission: “If [Cash Broker 1] is off today [Junior Broker 1] and these libors come roaring off I’ll hold you personally responsible. … keep onto that other muppet [Cash Broker 2] please if so!!”

On Wednesday, ICAP’s chief executive, Michael A. Spencer, said in a statement: “We deeply regret and strongly condemn the inexcusable actions of the brokers,” adding that none of the brokers still worked at the firm. “Their conduct contravenes all that ICAP stands for.”

In some of their messages, the defendants discussed the need to conceal what they were up to.

“Had a lot of compliance pressure recently due to the credit problems, we both need to be a little more subtle in our ‘views,'” Mr. Read told Mr. Hayes in an e-mail in November 2007, using all capital letters, according to the Justice Department.

“My e-mails etc. need to be worded more carefully.”