SEC, DOJ charge 21 in scheme that netted millions in illicit trading profits

The Securities and Exchange Commission charged 21 individuals Wednesday in connection with a decade-long insider trading scheme that the agency alleges generated millions of dollars in illicit profits using confidential information misappropriated from multiple global law firms.

The SEC’s complaint, filed in U.S. District Court for the District of Massachusetts, alleges that the scheme operated between 2018 and 2024 and was orchestrated by Nicolo Nourafchan, a mergers and acquisitions attorney based in Los Angeles, and his partner Robert Yadgarov, of Long Beach, New York. According to the complaint, Nourafchan misappropriated material nonpublic information from his firm’s clients involving more than a dozen pending corporate transactions, then tipped that information to other participants who agreed to share a portion of their trading profits or, in turn, tipped additional traders.

The complaint further alleges that Nourafchan and Yadgarov recruited an additional corporate lawyer who also misappropriated material nonpublic information involving additional deals and tipped that information to Nourafchan and Yadgarov. The SEC did not identify that individual by name in the press release.

“Today’s action highlights the SEC’s unwavering commitment to uncovering sprawling schemes, like the one alleged here, and holding individuals up and down the tipping chain accountable for their fraudulent conduct,” said Joseph G. Sansone, chief of the Division of Enforcement’s Market Abuse Unit.

All 21 defendants face charges of violating the antifraud provisions of federal securities laws. The SEC is seeking injunctive relief, disgorgement with prejudgment interest, and civil penalties, the agency said.

In a parallel action, the U.S. Attorney’s Office for the District of Massachusetts announced criminal charges against all of the defendants in the case.

The SEC said it received assistance from a range of domestic and international agencies in the investigation, including the FBI, the Financial Industry Regulatory Authority, and regulatory authorities in Denmark, the United Kingdom, Cyprus, Mauritius and Switzerland.

The case was brought by the SEC’s Market Abuse Unit within the Division of Enforcement.

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