The Commodity Futures Trading Commission has issued subpoenas to ICAP brokers and as many as 15 Wall Street banks as part of an investigation into possible price manipulation of benchmark interest-rate swaps, according to people familiar with the matter.
Bloomberg reports that the CFTC plans to interview about a dozen current and former brokers at ICAP’s Jersey City, New Jersey, office as well as dealers that contribute prices used to set the daily ISDAfix swap rates, said three of the people, who asked not to be named because the matter is private.
The regulator is probing whether ICAP brokers are colluding with dealers who stand to profit from inaccurate quotes, including failing to update published market prices after trades occur, one of the people said.
The ISDAfix levels, which the Federal Reserve includes in a daily report on money-market rates, are used by everyone from corporate treasurers to money managers to determine borrowing costs and to value much of the $379 trillion of outstanding interest-rate swaps globally.
The CFTC is probing the swaps trading as it works with European regulators in the rate-rigging scandal surrounding the London interbank offered rate. ICAP brokers in London have passed on requests from dealers asking rate-setters at rival banks to make favorable submissions, e-mails released as part of the European probe show.
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