The FBI Boston Division charged 30 people on Wednesday in a decade-long international insider trading ring that allegedly generated tens of millions of dollars in illicit profits. According to reports from the FBI, the defendants allegedly traded ahead of nearly 30 mergers and acquisitions (M&A) using confidential data stolen from leading US law firms. The scheme involved routing trades to overseas brokerage accounts in Russia, Israel, Panama, and Switzerland. As FBI Special Agent in Charge Ted E. Docks stated, "With today's arrests, the FBI has dismantled a large-scale, decade-long, international organized criminal network of corporate attorneys and financial professionals who are accused of stealing and trading on material, non-public information from several of our nation's leading law firms."
Federal prosecutors unsealed charges against 19 people arrested Wednesday and will appear in federal court in Los Angeles, Fort Lauderdale, and New York, while two others in Russia and Israel remain at large. According to the FBI, the following 16 people were charged in an 85-page indictment with two counts of conspiracy to commit securities fraud, two counts of securities fraud and one count of money laundering conspiracy: Pedram Fejal, Brian Fensterszaub, Mark Fensterszaub, Simon Fensterszaub, Ilya Gavrilov, Baruch Igal Hatanian, Yisroel Horowitz, David Moradi, Nicolo Nourafchan, David Ostrov, Yechiel Salzberg, Abe Shilian, Gavryel Silverstein, Joseph Suskind, and Robert Yadgarov. Nicolo Nourafchan was also charged with two counts of obstruction of justice, while Mark Fensterszaub, Moradi and Suskind face charges of making false statements to law enforcement. A second indictment charged five people with similar counts, including Lorenzo Nourafchan, Nowel Milik, Nicholas Rudela, David Makary, and Stjepan Vinski.
According to charging documents, Nicolo Nourafchan, who was a licensed corporate attorney at several large law firms, and others used their positions to access their law firms' internal computer networks to view confidential documents about pending acquisitions. The non-public information was then allegedly spread to other lawyers and traders in exchange for kickback payments of up to hundreds of thousands of dollars in cash. To hide the illegal network, federal authorities said the conspirators would use burner phones, encrypted files, coded language, and utilize in-person meetups where electronic devices were turned off. The web of insider trading information eventually grew to an international scale, with kickbacks consisting of up to hundreds of thousands of dollars in cash that would allegedly go through intermediaries and shell companies in foreign countries, making the scheme difficult to track. In one notable instance, Nourafchan is accused of viewing private deal information for a transaction involving Amazon and iRobot while on a leave of absence from his law firm, with another defendant then allegedly trading on that information.
According to the FBI announcement, this case represents part of a broader market integrity push as US authorities continue widening insider trading enforcement beyond traditional equities. The agency brought the first criminal crypto insider trading case in 2022, with former Coinbase product manager Ishan Wahi pleading guilty to tipping his brother on upcoming token listings and receiving a 24-month prison sentence and forfeiture of his cryptocurrency holdings. FBI Boston Special Agent in Charge Ted E. Docks stated that anyone who engages in insider trading fundamentally undermines the trust necessary for financial markets to function, and the FBI is committed to ensuring that those markets are a level playing field, not just profiting those with friends in the know.
