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Ex-Wachtell lawyer in insider trading ring later joined investment bank

Published
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11

Why it matters

The Department of Justice unsealed charges Wednesday against 30 individuals in a decade-long insider trading scheme centered on nonpublic information from major M&A transactions. Nicolo Nourafchan, a Yale Law graduate who worked at Sidley Austin, Latham & Watkins, Cleary Gottlieb, and Goodwin Procter, led the conspiracy. Participants traded on confidential deal details including Occidental Petroleum's $55 billion acquisition of Anadarko in 2019 and Burger King's $11 billion takeover of Tim Hortons in 2014. The scheme leveraged Nourafchan's recruitment of law school classmates positioned at major firms with M&A access. A former Wachtell Lipton lawyer and Yale classmate of Nourafchan has been identified as a co-conspirator; he later worked at an investment bank. The Southern District of New York is prosecuting the criminal case while the SEC pursues parallel civil charges.

Gabriel Gershowitz, who worked at Weil Gotshal, DLA Piper, and Willkie Farr, has already pleaded guilty along with eight others and is cooperating with prosecutors. Gershowitz faces a recommended two-year sentence. The identities of other charged defendants and the full scope of their roles remain under seal. Wachtell Lipton has denied wrongdoing and stated it is cooperating fully with authorities.

Attorneys should monitor this case for its implications on information barriers at elite firms handling sensitive transactions. The scale of the conspiracy—spanning a decade across multiple Biglaw institutions—suggests systemic vulnerabilities in how firms compartmentalize deal information and vet employee trading activity. The involvement of lawyers at firms known for discretion in M&A work raises questions about compliance protocols that may now face heightened regulatory scrutiny.

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