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September 25, 2013 5:14 pm
Just over a year ago setting of interbank rates were not a “high concern” because the interdealer broker he founded in the 1980s was not “front and forward” in authorities’ minds.
Now ICAP is to pay 4 per cent of its turnover in settlement and three former employees are under criminal indictment, including one nicknamed “Lord Libor”. UK regulators cited the group’s inadequate management systems and controls, and lack of oversight of the brokers involved.
On Wednesday, he repeatedly expressed his profound disappointment. As he acknowledged: “Their conduct contravenes all that ICAP stands for.”
He also defended his role as chief executive. “Personally I think I will be the best person to take the company forward,” he added.
In many ways Mr Spencer is the epitome of the City establishment. He is a privately educated son of a diplomat, a physics graduate from Oxford and a former treasurer of the Conservative party. A visitor to ICAP’s offices at Broadgate Circle in the heart of the City will see 20th century art, including pieces by Jack Vettriano and L.S. Lowry, adorn the walls. Guests are offered a glass of Mr Spencer’s preferred Bordeaux wines, with Pomerol a particular favourite of his.
Friends and acquaintances describe the 58-year-old as charming and gregarious and his annual fancy dress charity day in December, in which all ICAP’s profits for one day are given to good causes, is a highlight among his staff.
However, sat alongside his cultured and tasteful pursuits is a fiercely competitive outsider who, by his own admission likes a fight, likes a gamble and likes to win. He is also a man who has spent a lifetime bouncing back from setbacks.
The diplomat’s son arrived in England from Addis Ababa for the first time aged eight when he went to boarding school. The cold and greyness of the south of England was a sharp contrast to the heat and poverty of east Africa. He still holds the continent dear to his heart.
After Oxford, he took a job at Simon & Coates, the stockbroker, but was fired after losing heavily in the gold market after the Soviet Union invaded Afghanistan in 1979. He then became an interest rates analyst in London for Drexel Burnham, the US broker. There, he was taught about trading in the fast-emerging futures market by Richard Sandor, a well-respected veteran of the industry.
However, he was again fired a few years later, for trying to cover up a trading error. That prompted him to start Intercapital, later shortened to ICAP, in 1986 just as trading went global and investors turned to derivatives to hedge their interest rate and currency risk. It has grown into a company with nearly $1.5bn in annual turnover and a market capitalisation of £2.6bn.
On Wednesday, Mr Spencer’s attitude was far removed from the bullish, testosterone-fuelled trading floor world he has presided over for many years. “It’s been a profoundly regrettable period and we take it utterly seriously, as you would expect,” he said.
Employees have described Mr Spencer as a man quick to make important decisions. He will be again tested by his response to the Libor settlement.
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