Probe Into Ex-Moore Trader May End As U.K. Regulator Criticized

Jan 7 2014 | 3:01am ET

A former Moore Capital Management trader's four years under investigation for insider-trading may soon be coming to an end, amidst questions about British regulators' handling of such probes.

Julian Rifat was among nine people arrested on suspicion of insider-trading in early 2010. Since then, seven of the men have been charged—although the size of their alleged fraud has dropped from £27 million to £3 million—but Rifat is not among them.

That could change next week: A British judge, in response to a request from Rifat's lawyer in November, has given the Financial Conduct Authority until Jan. 10 to either charge Rifat or drop the case.

While Rifat was quickly released following his arrest, the continuing probe has left him unable to find a new job and has kept some of his assets frozen. The other one of the nine arrested men not to face charges, BNP Paribas' Clive Roberts, also remains in legal limbo.

The FCA, its predecessor, the Financial Services Authority, and the U.K. Serious Organised Crime Agency, have had conspicuously less success than their American counterparts. The British regulators have charged 35 people since 2009, five of whom have been acquitted and seven of whom are awaiting trial. By contrast, U.S. prosecutors have won a guilty plea or conviction in every case they've brought so far—nearly 80 of them.

Others arrested by British authorities have had the cases against them dropped without charges—but not without consequences. In December, the FCA said it had dropped its probe into Lodestone Natural Resources co-founders Carl Linderum and Tim Whyte and former GLG Partners trader Carl Esprey, but not before Lodestone had shut its doors and Esprey had lost his job. And in that case, it took the FCA only 10 months to complete its investigation.

By contrast, only two of the eight people arrested alongside Rifat have seen their cases resolved—both by guilty plea. Five others are still awaiting trial, four of whom were unable to enter pleas last month due to cuts to the U.K. legal aid budget; their trial is expected in the fall.

Despite the lengthy probes and arrests of innocent people, former FSA enforcement chief Margaret Cole has no regrets.

"A large part of the deterrent effect comes from the regulator doing this," she said of the arrests, "and you don't know when they might pop up and do it again," she told The Wall Street Journal.

In Depth

Q&A: Decathlon Capital On Revenue-Based Alternative Lending

Oct 30 2017 | 3:49pm ET

The explosion in private credit activity since the end of the financial crisis is...


CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

CAIS: How Technology is Disrupting the Alternative Investment Industry

Nov 7 2017 | 5:35pm ET

If there’s one thing that alternative investment professionals can agree on, it...