15 Plead Not Guilty in Decade-Long Insider Trading Scheme
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- Fifteen defendants, including a lawyer who worked at Sidley Austin, Latham & Watkins, and Goodwin Procter, pleaded not guilty in Boston federal court on Monday to securities fraud charges in the decade-long insider trading case.
- Prosecutors say Nicolo Nourafchan and personal injury attorney Robert Yadgarov orchestrated the scheme starting in 2014, with Nourafchan feeding tips on impending mergers to co-conspirators in exchange for kickbacks from trading profits.
- The indictment alleges the scheme involved tips on nearly 30 mergers and netted tens of millions of dollars; 30 people total have been charged, with nine having already pleaded guilty.
- Other elite law firms linked to the scheme include Wachtell, Lipton, Rosen & Katz and Willkie Farr & Gallagher — Gabriel Gershowitz, a former Willkie Farr lawyer, secretly pleaded guilty last year and is now cooperating with prosecutors.
- The indictment alleged defendants — many of whom are Jewish — used coded language tied to their backgrounds, calling one deal a "flight to Israel" and another a "rabbi."
- U.S. Magistrate Judge Judith Dein flagged a potential conflict of interest because Lorenzo Nourafchan, Nicolo's brother and founder of a fractional CFO firm, is paying his sibling's attorney fees.
- Defense attorney Michael Kendall, representing defendant Joseph Suskind, said his client is innocent and told reporters: "Evidence is more important than press releases."
Why it matters: The case is unusual for the prominence of its alleged inside source — associates at elite firms including Wachtell Lipton, long the most secretive of deal shops — feeding tips to a ring that allegedly traded on nearly 30 mergers. With nine guilty pleas already secured, including cooperating witness Gabriel Gershowitz, prosecutors head into trial with significant insider testimony against the remaining defendants.
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