Uncovering a Massive Insider Trading Scheme: 30 Defendants Charged in Multi-Million Dollar Fraud Case
A significant insider trading scheme involving 30 defendants, including corporate attorneys and financial professionals, has been uncovered, resulting in millions of dollars in illicit profits. The defendants allegedly accessed confidential information on nearly 30 merger and acquisition deals from top law firms, including one based in Massachusetts. Nineteen defendants have been arrested, while two in Russia and Israel are fugitives.
The first indictment charges 16 defendants with securities fraud conspiracy, securities fraud, and money laundering conspiracy. Another indictment charges five defendants with similar offenses. Nine additional defendants face charges for securities fraud conspiracy. The FBI has dismantled an international criminal network that profited from insider trading, undermining the financial markets' integrity.
The defendants, led by Nicolo Nourafchan and Robert Yadgarov, allegedly accessed confidential documents on pending acquisitions through their law firms' internal networks and shared the material non-public information (MNPI) for kickbacks. They recruited attorneys and insiders as sources of inside information and enlisted traders and middlemen to execute trades based on MNPI. The scheme involved traders from various locations and overseas.
To conceal the scheme, the defendants used burner phones, encrypted applications, coded language, and in-person meetings. They traded in brokerage accounts under shell companies, transferred proceeds through intermediaries and shell companies in foreign locations, and disguised payments as loans or business transactions. The charges carry significant prison sentences and fines.
The investigation is ongoing, with the U.S. Securities and Exchange Commission providing assistance. The defendants are presumed innocent until proven guilty in court. The FBI and prosecutors are committed to ensuring a level playing field in the financial markets and holding those engaged in insider trading accountable.