Federal prosecutors and agents analyzing evidence in a legal war room.
Federal prosecutors have unmasked a decade-long insider trading scheme, leading to charges against 30 individuals and the arrest of 19. The alleged plot involved attorneys exploiting their access to confidential information about pending mergers and acquisitions in exchange for kickbacks.
The U.S. Attorney’s Office for the District of Massachusetts announced the charges, identifying California attorney Nicolo Nourafchan as the alleged mastermind behind the operation. Authorities estimate the scheme generated tens of millions of dollars in illicit profits. Nourafchan faces additional charges of obstruction of justice. Two suspects are considered fugitives, located in Russia and Israel.
According to the indictment, Nourafchan, a licensed corporate attorney, allegedly used his position at various law firms to access internal computer networks. He then purportedly shared confidential, non-public information about upcoming deals with a network of individuals, including his partner, New York attorney Robert Yadgarov.
This information was allegedly passed to traders, including Gavryel Silverstein and Lorenzo Nourafchan, who then executed trades on behalf of Nourafchan and Yadgarov, or their own behalf, in exchange for kickbacks. In some instances, the information was relayed to other traders with the ultimate goal of profiting from impending market movements.
Prosecutors detailed one instance where Nourafchan allegedly took a leave of absence from his firm to view confidential documents related to the now-abandoned acquisition of iRobot. The traders involved allegedly operated both domestically and internationally, with transactions based on information from nearly 30 merger deals involving major public companies. Authorities noted that the conspirators often used coded language to evade detection.
The 30 defendants face serious federal charges, including conspiracy to commit securities fraud and money laundering conspiracy. Ted Docks, special agent in charge of the FBI’s Boston Division, emphasized that such actions undermine market trust and that the FBI is committed to ensuring a level playing field for all investors.
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