Federal Authorities Unseal Massive Insider Trading Case Alleging Global Network Stole Confidential Merger Information from Major U.S. Law Firms

BOSTON — Federal prosecutors have unsealed sweeping criminal charges against 30 individuals accused of participating in a decade-long insider trading network that authorities say generated tens of millions of dollars in illicit profits through the theft and exploitation of confidential merger and acquisition information obtained from some of the nation’s most prominent corporate law firms.

The charges, announced by the United States Attorney’s Office for the District of Massachusetts, describe what federal investigators allege was a highly organized international scheme involving corporate attorneys, financial professionals, traders, intermediaries, shell entities, foreign brokerage accounts, encrypted communications, and layered money laundering activity designed to conceal unlawful trading tied to major corporate acquisition deals.

Federal authorities stated that nineteen defendants were arrested during coordinated enforcement actions conducted across multiple jurisdictions including California, Florida, and New York. Two additional defendants located in Russia and Israel are currently considered fugitives.

According to prosecutors, the investigation uncovered an extensive insider trading structure allegedly operating for years through the theft of material non-public information connected to nearly thirty merger and acquisition transactions involving publicly traded companies.

Federal investigators allege the operation centered around confidential information accessed through internal law firm computer systems belonging to several elite corporate law firms, including one headquartered in Massachusetts.

The primary indictment charges sixteen defendants with conspiracy to commit securities fraud, securities fraud offenses, and conspiracy to commit money laundering.

The defendants charged 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.

Federal prosecutors additionally charged NICOLO NOURAFCHAN with obstruction of justice, while MARK FENSTERSZAUB, DAVID MORADI, and JOSEPH SUSKIND face allegations involving false statements to federal investigators.

A second indictment charges LORENZO NOURAFCHAN, NOWEL MILIK, NICHOLAS RUDELA, DAVID MAKARY, and STJEPAN VINSKI with conspiracy to commit securities fraud, securities fraud offenses, and money laundering conspiracy.

Federal authorities also charged MILIK and VINSKI with obstruction of justice. MAKARY faces allegations involving false declarations before a federal grand jury, while MILIK, RUDELA, and VINSKI are additionally charged with making false statements to investigators.

Nine other defendants were separately charged in connection with securities fraud conspiracy allegations as investigators continue pursuing additional leads tied to the operation.

According to federal charging documents, investigators allege that NICOLO NOURAFCHAN — a licensed corporate attorney who worked at several large law firms — improperly accessed confidential merger and acquisition documents through internal law firm networks, including transactions on which he allegedly had no legitimate professional involvement.

Federal prosecutors allege that Nourafchan then distributed the confidential material non-public information, commonly referred to as MNPI, to a wider insider trading network in exchange for substantial kickback payments.

Authorities allege ROBERT YADGAROV, another New York attorney, worked alongside Nourafchan to recruit additional insiders capable of obtaining confidential corporate deal information from within law firms and financial circles.

Investigators allege the operation evolved into a layered distribution network where inside information was passed through intermediaries and middlemen before reaching traders who executed securities transactions ahead of public merger announcements.

Federal prosecutors stated that middlemen including GAVRYEL SILVERSTEIN and LORENZO NOURAFCHAN allegedly acted as buffers between the original information sources and traders in an effort to obscure the origins of the stolen information.

Authorities allege traders located across New York, California, Florida, New Jersey, and overseas markets executed securities transactions while in possession of confidential acquisition information involving some of the largest merger deals of the last decade.

The government alleges the conspirators employed extensive counter-surveillance techniques and operational security measures to avoid detection by regulators and law enforcement.

According to prosecutors, members of the network allegedly relied on burner phones, encrypted messaging applications, coded language, foreign brokerage accounts, shell corporations, in-person meetings without electronic devices, and disguised financial transfers routed through jurisdictions including Panama and Switzerland.

Federal investigators stated the organization often disguised kickback payments as loans or business transactions to conceal the alleged laundering of illicit profits.

One example outlined in charging documents involves the 2022 proposed acquisition of iRobot.

Federal prosecutors allege that on June 7, 2022, Nicolo Nourafchan accessed confidential acquisition materials connected to iRobot while on a leave of absence from a law firm where he had previously worked. Investigators allege he was not assigned to the transaction yet still reviewed confidential internal records tied to the pending deal.

Authorities further allege that shortly afterward, SIMON FENSTERSZAUB purchased iRobot securities while in possession of material non-public information.

Charging documents include alleged coded communications exchanged between SIMON FENSTERSZAUB and GAVRYEL SILVERSTEIN in which merger discussions were allegedly disguised through references to a “rabbi,” surgeries, hospitals, and coded discussions about whether participants should “pull out” or remain “hopeful” regarding the pending transaction.

Federal authorities allege the operation represents one of the more extensive insider trading conspiracies uncovered in recent years because of its duration, international scope, use of attorneys as alleged information sources, and reliance on complex concealment tactics designed to frustrate regulatory oversight.

The investigation highlights growing federal concern surrounding the abuse of privileged access inside legal, financial, and advisory institutions involved in high-value mergers and acquisitions. Corporate attorneys and financial advisors often possess highly sensitive information capable of dramatically affecting stock prices before transactions become public.

Federal authorities stated that insider trading schemes tied to confidential merger activity undermine investor confidence and distort market fairness by allowing individuals with privileged access to profit ahead of ordinary investors.

The investigation was led by the Federal Bureau of Investigation’s Boston Division with assistance from the United States Securities and Exchange Commission.

The prosecutions are being handled by Assistant United States Attorneys Kaitlin R. O’Donnell and Ian J. Stearns of the Securities, Financial & Cyber Fraud Unit.

Federal prosecutors emphasized that the charges remain allegations and that all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

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Federal Bureau of Investigation (FBI) and United States Attorney’s Office for the District of Massachusetts. Additional case details derived from the federal indictment filed in United States v. Fejal et al.

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