On May 6, 2026, the Securities and Exchange Commission (SEC) announced charges filed against 21 individuals for their alleged participation in an elaborate insider trading scheme based on improper use confidential client information. Those charged include several mergers and acquisitions attorneys, who allegedly misappropriated client information within their law firms’ internal networks and provided the information to other financial professionals in exchange for kickbacks. The scheme resulted in millions of illicit profits between 2018 and 2024.
The Complaint, filed in the United States District Court for the District of Massachusetts, names two attorneys, Nicolo Nourafchan and Robert Yadgarov, as key participants in the scheme. Nicolo Nourafchan worked as a corporate attorney in several firms located in California and New York, handing mergers and acquisitions. While working at these firms, Nourafchan reportedly accessed confidential law firm databases to obtain material non-public information related to pending corporate transactions. Nourafchan would then provide the information to Robert Yadgarov and others who used the misappropriated information to place trades in the securities of U.S. companies. As the scheme proceeded to grow, Nourafchan and Yadgarov recruited other corporate attorneys who engaged in similar information misappropriation conduct at their own firms.
According to the Complaint, Nourafchan and Yadgarov profited from the scheme primarily through kickbacks paid by individuals who used confidential information to place trades. The elaborate scheme was set up with multiple layers of participants, ranging from New York to Florida, who either used the information to trade directly or served as middlemen to tip others who then traded on the inside information. The civil charges brought by the SEC are based on violations of Section 10(b) of the Securities and Exchange Act of 1934, 15 U.S.C. § 78j(b), and 17 C.F.R. § 240.10b-5.
Apart from the civil charges brought by the SEC, the U.S. Attorney’s Office for the District of Massachusetts revealed several participants named in the SEC’s Complaint have also been indicted for criminal charges related to the scheme. The Indictment, filed in the United States District Court for the District of Massachusetts on April 28, 2026, is based on violations including securities fraud, conspiracy to commit securities fraud charges, and money laundering conspiracy.
The recent action reflects the SEC’s attempts to dismantle illegal conduct which threatens to disrupt the fundamental operation of financial markets in the United States. In turn, the companion criminal Indictment filed against participants further demonstrates the zero tolerance approach taken by the Department of Justice in holding responsible parties accountable.