By Ginika Igboke
Federal authorities on Wednesday unsealed charges against 30 individuals accused of participating in a large-scale insider trading operation that allegedly spanned nearly a decade and involved the misuse of confidential information from major U.S. law firms.
Prosecutors say corporate attorneys, financial professionals, and other associates obtained and traded on material non-public information related to nearly 30 mergers and acquisitions, generating illegal profits.
Nineteen defendants have been arrested, with court appearances scheduled in cities including Los Angeles, New York, and Fort Lauderdale, Florida. Two additional suspects—one in Russia and another in Israel—remain fugitives.
Two Major Indictments Outline Broad Allegations
Court filings detail two primary indictments.
The first charges 16 defendants with conspiracy to commit securities fraud, securities fraud, and money laundering conspiracy. Those named include 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.
A second indictment charges five additional individuals—Lorenzo Nourafchan, Nowel Milik, Nicholas Rudela, David Makary, and Stjepan Vinski—with similar offenses. Nine more individuals face additional securities fraud-related charges as the investigation continues.
An attorney for the defendants could not be reached for comment.
Prosecutors Allege Exploitation of Confidential Deal Information
U.S. Attorney Leah B. Foley said the alleged conduct undermined trust in both financial markets and professional institutions.
“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,” Foley said. “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 defendants profited extensively through illegal means.
“That’s not merely gaming the system—it’s a federal crime,” he said.
Attorney Allegedly Accessed Confidential Corporate Data
Investigators allege that Nicolo Nourafchan, a corporate attorney at major law firms, accessed internal systems to review confidential merger and acquisition documents.
Prosecutors say he then passed the information to co-conspirators in exchange for cash kickbacks that allegedly reached hundreds of thousands of dollars.
Authorities claim the information was then relayed through a network of intermediaries and traders, who executed stock trades ahead of major public announcements on U.S. and international exchanges. Profits were allegedly funneled back through multiple layers of participants.
Traders operated across several states, including California, Florida, New Jersey, and New York, as well as overseas.
Sophisticated Methods Allegedly Used to Conceal Scheme
According to court documents, participants allegedly used burner phones, encrypted messaging apps, and coded language to avoid detection. Terms such as “flights” and medical references were reportedly used to disguise discussions about corporate deals.
Authorities also say meetings were conducted in person with devices turned off, and trades were executed through shell companies, nominee accounts, and foreign financial structures. Payments were allegedly disguised as loans or business transactions routed through jurisdictions including Panama and Switzerland.
iRobot Acquisition Cited as Example
One example highlighted in the indictment involves the potential acquisition of iRobot.
Prosecutors allege that Nicolo Nourafchan accessed confidential materials while on leave. Days later, Simon Fensterszaub allegedly purchased securities connected to the company before the deal became public.
Charges Carry Significant Prison Sentences
Authorities say the alleged scheme involved some of the largest mergers and acquisitions of the past decade.
If convicted, defendants face up to 25 years in prison on certain securities fraud conspiracy charges, along with fines that could reach twice the gain or loss from the alleged conduct. Other charges carry potential sentences of up to 20 years.
All defendants are presumed innocent unless proven guilty in a court of law.
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