BOSTON, May 8 - Federal authorities unsealed an indictment this week that lays out an extensive insider trading scheme prosecutors say relied on confidential information about merger and acquisition deals. Two individuals familiar with the matter told investigators that the unnamed former attorney referenced in the indictment is Avi Sutton, who left Wachtell, Lipton, Rosen & Katz and joined the boutique investment bank LionTree in 2022.
The indictment, which charged 30 people in a case stretching over roughly a decade, does not name Sutton. According to the two people who spoke on condition of anonymity because the information had not been publicly released, Sutton corresponds to the anonymous lawyer identified as "CC-2" in one of the filings. Prosecutors describe CC-2 as a participant in the scheme; the sources said Sutton provided confidential tips to the alleged organizers.
Prosecutors allege the conspiracy produced tens of millions of dollars in illegal gains and involved lawyers at major law firms who misappropriated confidential details from their employers on nearly 30 yet-to-be-announced mergers. The scheme, according to the indictment and related filings, spanned from 2014 to 2024.
Professional moves and public responses
Sutton, who worked as an associate at Wachtell from 2013 to 2022, later took roles at LionTree as general counsel and chief operating officer, according to the people familiar with the case and publicly available professional profiles. Repeated emailed requests for comment to Sutton went unanswered, the people said.
Early on Thursday, Sutton’s photograph and a description of his role appeared on LionTree’s website, according to the people familiar with the situation. By Thursday afternoon, the website no longer displayed his name or other identifying information.
The New York-based boutique bank, which focuses on technology, media and telecommunications transactions, did not immediately respond to requests for comment, the people said.
Wachtell confirmed it was among the law firms prosecutors identified as victims in the indictment. The firm issued a public statement noting that the individual referenced in the filings had left the firm more than four years ago and asserting that there are no allegations of wrongdoing against the firm. The statement also said the firm had cooperated fully with the U.S. Attorney’s office and would continue to do so.
"There are no allegations of wrongdoing against the firm," the law firm said. "Wachtell Lipton has cooperated fully with the U.S. Attorney’s office and will continue to do so."
Scope of allegations and enforcement actions
Prosecutors and the U.S. Securities and Exchange Commission, which initiated a related civil action against several defendants, say the scheme was coordinated by two lawyers and included the recruitment of other lawyers who provided inside information. The indictment names Nicolo Nourafchan and Robert Yadgarov as central figures whom prosecutors allege orchestrated the flow of confidential deal information to participants in the insider trading ring.
Nourafchan, a corporate lawyer who worked at multiple law firms named in the filings, and Yadgarov, described as a personal injury attorney, were among 19 people arrested on Wednesday in connection with the case, the filings say. Lawyers for the named defendants did not provide substantive public comment in response to requests, according to the people familiar with the matter.
Alleged timeline of tips provided by "CC-2"
The indictment attributes a series of tips to the anonymous lawyer identified as CC-2, beginning in 2014. Prosecutors cite an early instance in August 2014 in which CC-2 reportedly tipped information about a potential acquisition of Canadian coffee and restaurant chain Tim Hortons; the filing states that Burger King announced days later plans to acquire the chain.
Other deals cited in the indictment as having been the subject of tips provided by the lawyer include transactions involving Actelion, C.R. Bard, Qualcomm, and Express Scripts. The filings further allege that after the individual left Wachtell and joined LionTree, he provided a tip in August 2023 concerning a potential deal involving Adevinta, an online classifieds group backed by eBay.
Legal posture and continuing investigation
The person identified as CC-2 in the indictment is described by prosecutors as a participant in the scheme but is not charged. The indictment itself does not name LionTree or Wachtell; it refers to them generically as "Investment Bank A" and "Law Firm F." The two people who spoke to investigators and to journalists said the identification of Star and the linkage to those institutions is based on details in the indictment, professional profiles, and other information they provided.
Authorities allege the conduct produced substantial illegal profits, and both criminal charges and a parallel civil enforcement action by the SEC are part of the enforcement response. The case remains active, with multiple arrests announced and prosecutions moving forward, according to the filings and public statements by the entities identified as victims.
Public and private responses to the indictment have included acknowledgments from law firms identified as victims and limited public statements from the named defendants’ counsel or the institutions named generically in the indictment. Prosecutors have declined to provide additional comment through their spokesperson, according to the people familiar with the investigation.
Implications for M&A advisory and legal communities
The indictment, as unsealed, highlights alleged vulnerabilities related to confidential deal information at law firms and advisory boutiques that work on high-stakes merger transactions. Prosecutors allege a sustained pattern of misappropriation of privileged information across multiple firms and deals, which the filings say supplied illicit trading activity over a decade-long period.
At this stage, the individual identified as CC-2 has not been charged, and the investigation and related civil action are ongoing. The case will proceed through the criminal and civil justice systems as authorities and the parties named in the filings develop their positions and responses.