Key facts
- Nicolo Nourafchan, a former M&A lawyer, pleaded not guilty to leading an insider trading ring.
- The ring allegedly made tens of millions of dollars in illegal profits.
- Approximately 30 people have been charged in connection with the scheme.
- Nourafchan allegedly misappropriated confidential information on prospective M&A deals from three large firms.
- Eight people, including former lawyers from Willkie Farr & Gallagher and Weil, Gotshal & Manges, have pleaded guilty and agreed to cooperate with prosecutors.
A former mergers and acquisitions lawyer, Nicolo Nourafchan, has pleaded not guilty to charges that he led a large insider trading ring that generated tens of millions of dollars in illegal profits. Nourafchan, a graduate of Yale Law School, entered his plea on Monday in federal court in Boston. His brother, Lorenzo Nourafchan, and more than a dozen other defendants also pleaded not guilty. Approximately 30 individuals have been charged in connection with the scheme.
According to indictments and a parallel suit filed by the Securities and Exchange Commission, Nicolo Nourafchan allegedly misappropriated confidential information on prospective M&A deals from three major law firms where he worked between 2013 and 2023. He is accused of conspiring with college classmate Robert Yadgarov to recruit other corporate lawyers to provide insider tips, which were then allegedly passed to a network of relatives, friends, and associates.
Prosecutors allege the defendants used burner phones, encrypted applications, and clandestine meetings to conceal their activities. They also reportedly used coded language, referring to merger disclosures as dates for a "rabbi's" surgery. For example, one defendant allegedly texted about "the rabbi" days before Amazon.com Inc.'s August 2022 announcement of its acquisition of iRobot Corp.
The law firms from which information was allegedly stolen include Wachtell Lipton Rosen & Katz, Latham & Watkins, Goodwin Procter, Willkie Farr & Gallagher, and Weil, Gotshal & Manges. Gabriel Gershowitz, a former lawyer at Willkie and Weil Gotshal, is among eight individuals who have pleaded guilty and agreed to cooperate with prosecutors.
Lawyers for the Nourafchans and most other defendants declined to comment. Michael Kendall, an attorney for defendant Joseph Suskind, stated his client is innocent and that "evidence is more important than press releases."