Julian Rifat, a former trader at Moore Capital Management LLC, will be charged as soon as this month in the U.K.’s biggest insider-trading case, according to two people with knowledge of the case.
Rifat, who was arrested nearly four years ago, will be charged by the Financial Conduct Authority no later than early next month, said one of the people, who asked not to be identified because the matter isn’t public. His lawyer was told by the regulator yesterday that he will be charged soon, the other person said. A hearing for Rifat at a London criminal court scheduled for today has been canceled.
The U.K. authority stepped up its efforts to prosecute insider trading in the wake of the financial crisis. Rifat will be the ninth person -- and one of the most high-profile -- to be charged in the case, known as Operation Tabernula. A 10th suspect, Clive Roberts, who was the head of European sales trading at Exane BNP Paribas, hasn’t been charged.
“Lengthy delays between the investigation and the ultimate prosecution are common and create numerous problems for all parties,” said Ben Rose, a defense lawyer in London at Hickman & Rose. “Four years is a long time to leave an individual in limbo.”
Rifat was an execution trader in the London office of Moore Capital, a New York-based firm that oversees about $12 billion. He was taken into custody in 2010 on his forty-first birthday and has been under investigation since. Rifat’s lawyer didn’t immediately respond to a request for comment.
Eight other men have been charged in the probe. The case against former Deutsche Bank AG managing director Martyn Dodgson is being heard with Iraj Parvizi, a former director at Aria Capital Ltd., Grant Harrison, a former managing director at Altium Capital Ltd., Benjamin Anderson, Andrew Hind and Richard Baldwin. Parvizi pleaded not guilty in London last month to one count of conspiracy to insider deal. The other five haven’t entered pleas.
That case has stalled after four of them lost their trial lawyers because of cuts to U.K. legal aid in December. They are scheduled to appear in court this month.
Graeme Shelley, an independent stockbroker, has also been charged. Paul Milsom, a former Legal & General Group Plc equities trader, pleaded guilty and was sentenced in March to two years in prison for passing inside information on block trades 28 times to Shelley. A block trade is an unusually large secondary market trade.
At a private hearing in November over Rifat’s assets, a judge told the FCA to decide whether it was going to charge Rifat by today, according to one of the people. A person facing prosecution is usually issued a summons to attend court or a police station before they are charged.
“Delay is never a good thing,” said Robert Brown, a lawyer in London at Corker Binning. “It can make a case more difficult to prosecute and there is an enormous cost to the individual and people around them, often financially and personally, from the stress of being under investigation for such a long period. It is in the public interest to prosecute wrongdoing but a balance has to be found.”
The FCA’s predecessor, the Financial Services Authority, said at the time of the first arrests in the case that it believed “city professionals passed inside information to traders -- either directly or via middlemen -- who traded on this information and have made significant profits.”