Nicolo Nourafchan, the former mergers and acquisitions attorney accused of leading a decade-long insider trading scheme that prosecutors say netted tens of millions of dollars, pleaded not guilty on Monday in federal court in Boston, along with 14 other defendants.
Having held positions at Sidley Austin, Latham & Watkins, and Goodwin Procter, Nourafchan is accused of siphoning confidential details about nearly 30 corporate deals in progress and passing those tips to traders and go-betweens who rewarded him with a share of the profits, according to the U.S. Attorney's Office for the District of Massachusetts. Thirty people in total have been charged in the case.
Not guilty pleas were also entered by personal injury attorney Robert Yadgarov, Nourafchan's alleged co-orchestrator, and by Lorenzo Nourafchan, who runs a fractional CFO and accounting firm and is Nicolo's brother, according to Reuters.
The pair are also accused of drawing lawyers from other elite firms into the conspiracy as tip suppliers, among them attorneys from Wachtell, Lipton, Rosen & Katz, Weil, Gotshal & Manges, and Willkie Farr & Gallagher. Among those recruited lawyers is Gabriel Gershowitz, who shared college years with both Nourafchan and Yadgarov before practicing at Willkie and Weil Gotshal; he has since entered a guilty plea and is assisting the government's investigation, according to Bloomberg. Eight other defendants had previously entered guilty pleas that were unsealed when prosecutors announced the case on May 6.
To keep the operation hidden, participants allegedly relied on a combination of disposable phones, encrypted messaging platforms, face-to-face gatherings, and coded language, prosecutors say. Court documents describe how, in the weeks ahead of Amazon $AMZN's August 2022 announcement that it planned to buy iRobot, one defendant sent messages asking when the "rabbi" would have surgery — a coded way of asking when the deal would be made public.
Outside court, Nicolo Nourafchan's attorney Martin Weinberg issued a statement saying his client had denied every charge brought against him and that the defense team plans to mount a forceful response, according to Reuters. Weinberg's exact words: "asserted his innocence to each allegation at his arraignment today and we intend a vigorous and compelling defense." Joseph Suskind, a Florida-based insurance adjuster whom prosecutors accuse of generating roughly $3 million in profits by acting on tips across numerous deals, was declared innocent by his attorney Michael Kendall. "Evidence is more important than press releases," Kendall told reporters, according to Bloomberg.
A potential complication arose when it emerged that Lorenzo Nourafchan has taken on responsibility for his brother's legal bills, prompting U.S. Magistrate Judge Judith Dein to flag the risk of diverging interests down the line. "You may have different interests as this goes on," Dein said, according to Reuters.
A conviction on the gravest counts in the indictment carries a maximum sentence of 25 years behind bars. The Securities and Exchange Commission has filed a parallel civil suit against 21 of the defendants.