SEC Charges 21 Individuals in Alleged Decade-Long Insider Trading Scheme
The Securities and Exchange Commission has charged 21 individuals for their alleged roles in a wide-ranging insider trading scheme involving confidential information allegedly stolen from multiple global law firms. According to the SEC, the scheme ran for years and generated millions of dollars in illicit trading profits.
SEC Alleges Misappropriation of Law Firm Client Information
According to the SEC’s complaint, the alleged scheme centered on material nonpublic information concerning pending corporate transactions. The SEC alleges that between 2018 and 2024, Nicolo Nourafchan, a mergers and acquisitions attorney based in Los Angeles, misappropriated confidential information from his law firm’s clients involving more than a dozen corporate deals.
The SEC further alleges that Nourafchan worked with Robert Yadgarov of Long Beach, New York, to trade on that information and tip others. Those individuals allegedly agreed to share a portion of their profits or passed the information further down the tipping chain to additional traders.
Alleged Insider Trading Involved Multiple Lawyers and Corporate Deals
The SEC’s complaint alleges that Nourafchan and Yadgarov recruited another corporate lawyer into the scheme. That lawyer allegedly misappropriated additional material nonpublic information about separate transactions and tipped that information to Nourafchan and Yadgarov.
The case is significant because the SEC alleges misconduct not only by traders, but also by attorneys who had access to highly sensitive client information. Law firms routinely handle confidential information about mergers, acquisitions, tender offers, financings, and other market-moving events. When that information is used for personal trading or tipped to others, it can give rise to serious civil and criminal exposure.
SEC Focuses on the Insider Trading “Tipping Chain”
The SEC’s action highlights the agency’s continued focus on insider trading networks that extend beyond the original source of confidential information. In insider trading cases, liability may reach not only the person who misappropriates the information, but also those who receive tips, trade on the information, share profits, or pass the information to others.
Joseph G. Sansone, Chief of the SEC Division of Enforcement’s Market Abuse Unit, stated that the case reflects the SEC’s commitment to uncovering “sprawling schemes” and holding individuals throughout the alleged tipping chain accountable.
Charges Filed in Federal Court
The SEC filed its complaint in the U.S. District Court for the District of Massachusetts. The complaint charges the defendants with violating the antifraud provisions of the federal securities laws.
The SEC seeks injunctive relief, disgorgement of allegedly ill-gotten gains with prejudgment interest, and civil monetary penalties.
Criminal Charges Also Announced
In a parallel action, the U.S. Attorney’s Office for the District of Massachusetts announced criminal charges against all defendants named in the SEC’s civil case. Parallel civil and criminal proceedings are common in significant insider trading matters, particularly where prosecutors allege coordinated conduct, multiple participants, or substantial trading profits.
Why This Case Matters
This case underscores several recurring themes in SEC insider trading enforcement. First, the SEC continues to prioritize trading involving mergers and acquisitions because deal information can be highly market sensitive. Second, the agency remains focused on professionals—including lawyers, bankers, consultants, and advisers—who misuse confidential client information. Third, the SEC and federal prosecutors are increasingly aggressive in pursuing not only the original source of information but also downstream tippees.
For attorneys, financial professionals, and market participants, the case is a reminder that material nonpublic information must be protected carefully. Trading on confidential deal information, tipping others, or sharing profits from trades based on inside information can result in SEC enforcement actions, civil penalties, disgorgement, industry bars, and criminal prosecution.
Mark Astarita is a nationally recognized securities attorney, who represents investors, financial professionals and firms in securities litigation, arbitration and regulatory matters, including SEC and FINRA investigations and enforcement proceedings.
He is a partner in the national securities law firm Sallah Astarita & Cox, LLC, and the founder of The Securities Law Home Page - SECLaw.com, which was one of the first legal topic sites on the Internet. It went online in 1995 and is updated daily with news, commentary and securities law related links.
