Members of ‘several’ of the US’s premier law firms are among more than 30 individuals charged in connection with a 'large-scale, decade-long insider trading scheme', the US Department of Justice said yesterday. The defendants are alleged to have stolen information on nearly 30 merger and acquisition deals from firms and to have made millions trading on the insider knowledge. 

The US Attorney’s Office for the District of Masachusetts said that 19 defendants have been arrested across the US. Two defendants located in Russia and Israel are considered fugitives.

A first indictment names 16 defendants charged with two counts of conspiracy to commit securities fraud, two counts of securities fraud and one count of money laundering conspiracy. They include attorney Nicolo Nourafchan, 43, of Los Angeles, who is also charged with two counts of obstruction of justice. 

U.S Department of Justice sign

The US Department of Justice has said law firm members are among more than 30 individuals charged in connection with an 'insider trading scheme'

Source: Alamy

A second indictment charges five named defendants with two counts of conspiracy to commit securities fraud, two counts of securities fraud and one count of money laundering conspiracy. Charges against nine other defendants for securities fraud conspiracy were also unsealed. No law firms are named in the indictments. However Reuters reports today that Nourafchan, who graduated from Yale Law School, worked from 2013 to 2023 at firms including Sidley Austin, Latham & Watkins and Goodwin Procter. 

According to the charging documents, Nourafchan and others, accessed internal computer networks to view confidential documents relating to pending acquisitions and then provided the information to others in exchange for cash kickbacks of hundreds of thousands of dollars. Nourafchan and his partner, Robert Yadgarov, another New York attorney, allegedly recruited other attorneys and insiders to serve as sources of inside information. 

Conspiracy to commit securities fraud carries a penalty of up to 25 years in prison.

'The trading on unannounced financial news alleged here not only violated the securities laws, but it also took advantage of the special access and ethical duties that come with a law license,’ said US Attorney Leah B. Foley. 'With today’s arrests, the FBI has dismantled a large-scale, decade-long, international organized criminal network of corporate attorneys and financial professionals who are accused of stealing and trading on material, non-public information from several of our nation’s leading law firms.'