A former City trader was sentenced to 19 months in prison on Thursday for his part in an insider trading scam involving multiple mobile phones, clandestine meetings in City pubs and payment for a luxury car and holiday.
Julian Rifat, who was a senior trader at stockbroker Moore Capital, was also fined £100,000 and ordered to pay costs of £159,402. He pleaded guilty to passing information gleaned from his job about upcoming company fundraisings to Graeme Shelley, a broker at Novum Securities. Shelley traded shares in the companies based on the information and split the proceeds totalling £285,000 equally with Rifat.
Passing sentence Judge McCreath said Rifat had acted “deliberately and dishonestly” but gave him credit for his guilty plea, which he made after four years of protesting his innocence.
Rifat and Shelley used multiple pay-as-you-go mobile phones in an attempt to hide their contact. They met in City bars such as the Rack and Tenter and the Crispin, both near Moorgate, to divide the proceeds.
Shelley paid Rifat in cash but also paid £48,500 for Rifat’s new Land Rover and £15,000 for Rifat’s family holiday in Oman. Rifat went on the holiday in summer 2010, despite being arrested on suspicion of insider dealing after it was booked.
Rifat is the third man to be sentenced as part of Operation Tabernula, the FCA’s biggest and most complex insider dealing investigation. Shelley received a two-year suspended sentence in March 2014 and Paul Milsom was sentenced to two years in March 2013.
Milsom was a senior trader at Legal & General Investment Management. He tipped off Shelley when his company was about to make large trades that would move the market and Shelley traded shares to capitalise on those movements. This made the pair a total of £560,000.
On one occasion in 2009, Milsom called Shelley from a new pay-as-you-go phone for a fraction of a second and then sent him a message via a Bloomberg trading console saying: “That’s me.”
There is no evidence to link Milsom and Rifat directly. Milsom’s activities only came to light when Shelley was arrested and the FCA found four pages of handwritten notes referring to trades with “JR”, who was Rifat, and “MP”, who turned out to be Milsom and was arrested two years later.
The FCA said its investigation involved a team of up to 30 people trawling through more than 110,000 lines of trading data, more than 700,000 phone communications and more than 10m emails and instant messages.
Six other defendants face trial over a separate alleged conspiracy linked to Operation Tabernula. They deny the charges.
This article was written by Sean Farrell, for theguardian.com on Thursday 19th March 2015 19.36 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010