Tullett Tumbles on Report Linking Broker to Libor-Rigging

Tullett Prebon Plc, the British inter-dealer broker run by Terry Smith, fell the most in three months after the Financial Times reported that one of its employees has been implicated in the Libor-rigging scandal.

The unidentified employee agreed to relay requests from a UBS AG derivatives trader asking employees at others banks to make favorable submissions to the London interbank offered rate, the FT reported, citing filings released as part of the Swiss bank’s settlement with regulators and two people with knowledge of the matter. Tullett also received “corrupt payments” from Royal Bank of Scotland Group Plc as the lender tried to boost its influence over the brokers, the FT said.

The stock fell 5.9 percent to 282.80 pence in London trading, its steepest decline since Nov. 9. The shares are up 12 percent so far this year, for a market value of 615 million pounds ($955 million).

“Tullett Prebon has never been informed by the Financial Services Authority or any other regulatory authority that Tullett Prebon or any of its brokers are under investigation in relation to Libor,” the firm said in a statement today.

Interdealer brokers, the middlemen who line up buyers and sellers of securities for banks, are emerging as key enablers in the Libor scandal after RBS, UBS and Barclays Plc paid total fines of $2.6 billion for rigging global interest rates.

Employees at ICAP Plc, the world’s biggest interdealer broker, and RP Martin Group Ltd., a smaller British competitor, are being probed over their alleged involvement in the manipulation of benchmark interest rates, three people with knowledge of the matter said last week.

To contact the reporter on this story: Gavin Finch in London at gfinch@bloomberg.net

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net

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Feb. 1 (Bloomberg) -- The London interbank offered rate is the basis for more than $300 trillion of securities. The banks that set the rate stand accused of rigging it for years to boost profits. Five years after alarm bells first sounded, regulators are handing out fines and criminal sanctions to those responsible for rate manipulation. This story is featured in the March issue of Bloomberg Markets Magazine. Bloomberg Television's Mark Barton reports. (Source: Bloomberg)