Powerful banker pleads guilty in biggest ever insider trading case

He is the third person to enter a guilty plea having been ensnared by the watchdog's 'Operation Tabernula'

The City watchdog has claimed its most senior scalp yet in what has become Britain’s biggest and most complex insider trading case to date.

The Financial Conduct Authority (FCA) said former Moore Capital trader Julian Rifat –once feted in the City on a list of “15 institutional investors that matter” – had pleaded guilty to eight counts of passing on inside information during the course of his employment. He is the third person to enter a guilty plea having been ensnared by the watchdog’s “Operation Tabernula”.

The FCA said he had passed on information on eight companies – including Barclays, Volkswagen, Metro, a German retailer, and Iberdrola, a Spanish power company – to an associate, Graeme Shelley, who worked as a broker at Novum Securities.

Shelley, who then traded on the information for their joint benefit, pleaded guilty in March to insider trading – along with Rifat and another associate, the former Legal & General trader Paul Milsom – receiving a two-year suspended sentence. Milsom was sentenced in 2013.

Rifat, now 44, is set to be sentenced in January and could face jail. Profits from the eight counts amounted to £250,000 and he will also face a confiscation and costs hearing at a later date.

He is one of the highest-profile City figures to have been pursued by the FCA. Operation Tabernula – Latin for “little pub” – was instigated at a time when the watchdog was seeking to step up its pursuit of City miscreants amid rising public anger over the activities of white-collar criminals in the wake of the financial crisis.

A member of the City aristocracy, Rifat had previously worked for a number of investment banks and hedge funds, before and in between his two stints at Moore, a US firm that managed more than $15bn.

In addition to his City exploits, he had been a star athlete, competing in the triathlon and high jump, and owned an Oxford home close to that of Sir Hector Sants, the former boss of the Financial Services Authority.

While the guilty plea represents a notable feather in the FCA’s cap, the case has been complicated by a bitter row between the Government and the legal profession over barristers’ fees, which has put a brake on complex and expensive cases. It was originally scheduled to have been wrapped up by now.

Tracey McDermott, the FCA’s director of enforcement and financial crime, said: “Insider dealing investigations are complex and long-running. Nevertheless, we are committed to undertaking the painstaking analytical work which is required to bring these cases to court. In this case, measures were taken by those involved to conceal their activities. This included communicating via unregistered pay-as-you-go mobile telephones and the diversion of trading profits to third parties.

“The guilty plea is a reflection of our capability and determination to tackle these challenging and complex cases.”

The watchdog said that since 2008 it had secured a total of 24 convictions related to insider dealing. Another eight are currently being prosecuted.