30 Charged in Alleged Global Insider Trading Ring Targeting Law Firm Secrets

Federal authorities unsealed charges on May 6 against 30 individuals in what they call a massive, decade-long insider trading scheme that exploited confidential information from major U.S. law firms.

The indictments accuse corporate attorneys, financial professionals, and others of stealing material non-public information on nearly 30 mergers and acquisitions and trading on the details for illicit profits.

Nineteen defendants were arrested. Court appearances are scheduled in locations such as Los Angeles; Fort Lauderdale, Florida; and New York City. Two other defendants, one in Russia and one in Israel, are still fugitives.

Public documents outline two main indictments. One charges 16 defendants with conspiracy to commit securities fraud, securities fraud, and money laundering conspiracy.

Among the accused are Pedram Fejal, Brian Fensterszaub, Mark Fensterszaub, Simon Fensterszaub, Ilya Gavrilov, Baruch Igal Hatanian, Yisroel Horowitz, God Izraelov, David Moradi, Nicolo Nourafchan, David Ostrov, Yechiel Salzberg, Abe Shilian, Gavryel Silverstein, Joseph Suskind, and Robert Yadgarov.

An attorney for the defendants could not be reached.

A second indictment lists five more on similar counts: Lorenzo Nourafchan, Nowel Milik, Nicholas Rudela, David Makary, and Stjepan Vinski. Nine others face additional charges, such as securities fraud conspiracy, with the investigation ongoing.

“Our country’s financial markets and professional firms should be free from the rampant fraud and breaches of duty that these charges allege,” U.S. Attorney Leah B. Foley said in a statement.

“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.”

FBI Special Agent in Charge Ted Docks said the accused made out like bandits.

“That’s not merely gaming the system—it’s a federal crime,” he said.

Nicolo Nourafchan, a licensed corporate attorney at large law firms, allegedly gained access to internal networks to view confidential deal documents, according to charging documents. He then sent the information to coconspirators for kickbacks of up to hundreds of thousands of dollars in cash.

The pair allegedly sent tips to middlemen and traders, who executed trades ahead of major deals on U.S. and foreign exchanges. Profits were allegedly kicked back up the chain. Traders operated from California, Florida, New Jersey, New York, and overseas.

Participants allegedly used burner phones; encrypted apps; coded language, including references to “flights” and medical metaphors for deals; and in-person meetings with devices shut off. They conducted trades through shell companies, nominees, and foreign accounts, and disguised payments as loans or business deals routed through Panama, Switzerland, and other countries.

One example cited involves the potential acquisition of iRobot. Nicolo Nourafchan allegedly viewed confidential materials while on leave. Days later, Simon Fensterszaub allegedly bought securities.

The scheme allegedly spanned some of the past decade’s largest merger and acquisition deals. The accused face up to 25 years in prison for some securities fraud conspiracy counts, with fines up to twice the gain or loss. Other charges carry up to 20 years. Defendants are presumed innocent unless proven guilty.