FCA issues prohibition order against former Moore Capital trader

Maria Nikolova

The order prohibits Julian Rifat from performing any function in relation to any regulated activities carried on by an authorised or exempt person, or exempt professional firm.

The UK Financial Conduct Authority (FCA) today issued an order, pursuant to section 56 of the Act, prohibiting Julian Rifat from performing any function in relation to any regulated activities carried on by an authorised or exempt person, or exempt professional firm. The prohibition order takes effect from today, September 1, 2020.

Mr Rifat committed offences involving dishonesty. He pleaded guilty on 7 November 2014, at Southwark Crown Court, to insider dealing, contrary to section 52(1) of the Criminal Justice Act 1993; and was sentenced on 19 March 2015 to 19 months’ imprisonment, fined £100,000 and ordered to pay costs of £159,402.

Mr Rifat’s offences consisted of eight occasions of insider dealing over a six-month period from 1 June 2009 to 24 November 2009, when he was an approved person. At the time of the offending Mr Rifat was employed as a senior trader by Moore Europe Capital Management, LLP (“Moore Capital”) where he had worked from 19 June 2008. He was a trader, head of European equity sales trading and also in charge of risk management at Moore Capital.

Moore Capital is a US-based hedge fund and Mr Rifat was based in their London office. They are a major investor in the market and they would be approached frequently about large scale transactions ahead of any public announcement. The price sensitivity of the fact and the reason for those transactions was therefore both obvious and explicit, particularly to someone in Mr Rifat’s position.

Prior to each of the eight occasions of insider dealing over the six-month period, Mr Rifat discussed the transactions. These discussions included the formal recognition that he was about to receive price-sensitive information leading to him being “wall-crossed”, and in fact in each instance thesubsequent public announcement of the price-sensitive event did move the market. This “wall-crossing” process entailed a script being read aloud or supplied before the price-sensitive information was supplied. On each occasion Mr Rifat confirmed to his counterpart that he was aware that he was “over the wall”.

Mr Rifat did not deal in his own name or execute any trading himself, but dealt via a professional intermediary, a self-employed stockbroker, also approved by the Authority, who placed the trade with others. After Mr Rifat had been ”wall-crossed”, he would call or text his intermediary within a short period of time so as to provide the inside information before a public announcement was made or an offer was withdrawn. The value across all eight of the trades, each of which was in the form of spread bets, was £285,000, from which Mr Rifat received a substantial sum.

It appears to the FCA that Mr Rifat is not a fit and proper person to perform any function in relation to any regulated activity carried on by an authorised person, exempt person or exempt professional firm. His conviction demonstrates a clear and serious lack of honesty and integrity such that he is not fit and proper to perform regulated activities, the regulator concluded.

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