LONDON – Two former senior executives at RP Martin have been fined and banned from the securities industry for cultural and compliance failings at the small British brokerage firm, which was fined more than $2 million last year for misconduct related to the manipulation of the global benchmark known as the London interbank offered rate, or Libor.
The Financial Conduct Authority of Britain levied a fine of 210,000 pounds, or about $317,000, against David Caplin, the broker’s former chief executive, and a fine of £105,000 against Jeremy Kraft, the firm’s former compliance officer.
Mr. Caplin and Mr. Kraft were also barred from performing “significant influence functions” at financial services firms, the regulator said.
“Mr. Kraft and Mr. Caplin were responsible for setting the right culture at Martins and ensuring that the firm’s risk management systems and controls were adequate to oversee its broking activities,” Georgina Philippou, the F.C.A.’s acting director of enforcement and market oversight, said in a statement. “They failed to do this.”
She continued: “Proper systems and controls were nonexistent and there was a culture at Martins where revenue came first and compliance was seen as unimportant rather than as an integral part of the running of the firm.”
Libor helps determine the borrowing costs for trillions of dollars in loans.
By agreeing to settle at an early stage of the investigation, Mr. Caplin and Mr. Kraft received a 30 percent reduction on the potential fine.
In May, RP Martin agreed to pay $1.2 million in penalties to settle accusations by the Commodity Futures Trading Commission in the United States related to the manipulation of Libor, as it was tied to the Japanese yen.
RP Martin was also fined £630,000 by the Financial Conduct Authority related to conduct by employees at its Martin Brokers unit.
Since it first emerged publicly in 2012, the Libor scandal has ensnared some of the world’s largest banks and tarnished the reputations of many of Britain’s leading lenders.
Prosecutors in Britain have brought criminal charges against 13 individuals related to the manipulation of Libor, including two former RP Martin brokers.
In its investigation, the Financial Conduct Authority found that RP Martin, under Mr. Caplin’s leadership, had a culture that put profits ahead of regulatory compliance.
“A culture developed where brokers would provide lavish entertainment to traders in exchange for commission income,” the authority said.
The Financial Conduct Authority said the lack of proper controls had other consequences, among them the failure to detect so-called wash trades, which were used to reward Martin brokers in their efforts to manipulate Libor submissions.