Overview
U.S. federal prosecutors announced criminal charges Wednesday against 30 people accused of participating in a broad insider trading ring that, authorities say, used confidential M&A information taken from prominent Wall Street law firms to inform trades. The Securities and Exchange Commission filed parallel civil charges against 21 defendants, with regulators alleging the scheme produced illicit gains connected to nearly 30 corporate deals.
Alleged structure and leaders of the scheme
According to the U.S. Attorney's Office for the District of Massachusetts, two individuals were identified as the organizers of the alleged operation: Nicolo Nourafchan, 43, a Los Angeles-based M&A attorney, and Robert Yadgarov, 45, of Long Beach, New York. Prosecutors allege that the pair recruited both attorneys and corporate insiders to provide confidential deal information in return for cash kickbacks.
Prosecutors say the network moved information down a chain of recipients so that traders positioned ahead of public announcements could buy or short securities tied to the pending transactions. Charging documents describe an extensive web of sources - including attorneys and corporate insiders - who allegedly transmitted sensitive M&A details to market participants prepared to profit from advance knowledge.
Scope, timeframe and financial mechanics
Investigators allege the scheme was active from at least 2018 through 2024. Prosecutors contend the operation generated tens of millions of dollars in illegal profits from trades based on material nonpublic information related to pending mergers, acquisitions, and other corporate transactions. The SEC simultaneously accused 21 defendants in civil filings, saying the conspiracy produced millions in illicit gains tied to nearly 30 corporate deals.
Authorities said the alleged ringleaders paid substantial kickbacks to sources who supplied confidential information, with some payments reaching hundreds of thousands of dollars for a single transaction. Prosecutors allege that funds were moved in cash and routed through intermediaries and shell entities in offshore jurisdictions, including Panama and Switzerland. The payments were often disguised as loans or legitimate business transactions, according to charging papers.
Enforcement action and arrests
Law enforcement coordinated arrests across multiple jurisdictions on May 6. Nineteen defendants were taken into custody during the operation, while two suspects remain at large in Russia and Israel. Arraignments for those arrested are expected in the coming weeks in federal court in Boston and Los Angeles, though specific scheduling has not been released.
Prosecutors brought counts that include securities fraud, conspiracy to commit securities fraud, and money laundering conspiracy. Those offenses carry potential prison sentences measured in decades. The SEC's civil complaint seeks injunctive relief, disgorgement with prejudgment interest, and civil penalties.
Responses and affected firms
Three well-known law firms - Goodwin Procter, Latham & Watkins, and Wachtell, Lipton, Rosen & Katz - confirmed Wednesday that former employees were involved in the alleged scheme. While prosecutors did not formally identify the firms from which information was taken, the descriptions of the deals implicated the firms' M&A practices.
Several defendants hail from South Florida, including seven individuals listed as residing in Hollywood, Fort Lauderdale, and Sunny Isles Beach.
"Our country’s financial markets and professional firms should be free from the rampant fraud and breaches of duty that these charges allege," said United States Attorney Leah B. Foley. "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. If the American people believe that trading is only for the connected, they will keep their investment and retirement savings out of the markets, which will hurt our economy. Today’s charges, the result of a years-long investigation with our law enforcement partners, are part of my office’s ongoing efforts to ensure a level playing field for all investors."
"Today's action highlights the SEC's unwavering commitment to uncovering sprawling schemes, like the one alleged here, and holding individuals up and down the tipping chain accountable for their fraudulent conduct," said Joseph G. Sansone, chief of the SEC Division of Enforcement's Market Abuse Unit.
Legal consequences and next steps
The indictments are comprehensive in the charges listed and seek serious criminal penalties. The SEC's parallel civil actions pursue monetary relief and prohibitions designed to prevent future misconduct. With arraignments pending and multiple defendants already in custody, prosecutors and regulators say the matter reflects the result of a years-long probe involving law enforcement partners at multiple levels.
Who is impacted
The allegations touch on legal firms that handle sensitive M&A work, market participants who trade on material nonpublic information, and the broader investor community that relies on fair and transparent markets. Prosecutors framed the actions as necessary to maintain public confidence in securities markets and the ethical obligations tied to legal practice.