Illegal Eagles
Elite corporate lawyers allegedly formed an insider trading ring and "made out like bandits" with clients' confidential information
“How does an attorney sleep? First, he lies on one side, then he lies on the other.” – A classic lawyer joke that never gets old.
Who knew Burger King would buy Tim Hortons?
Who knew Amazon was going to buy iRobot?
Who knew Johnson & Johnson was gunning for a Swiss biopharmaceutical company called Actelion?
A bunch of overpaid lawyers and financial professionals knew, and last week the feds indicted 30 of them, alleging an insider trading ring that ran for more than a decade and netted tens of millions in ill-gotten gains.
The lead tipster was allegedly Nicolo Nourafchan, 43, who worked at Boston-based Goodwin Procter as a corporate lawyer. He owed loyalty, trust and confidence to the firm and its clients, but selling their material non-public information to greedy stock traders allegedly gave a lofty boost to his hourly rate.
Nourafchan also allegedly recruited M&A lawyers at other elite firms – Wachtell Lipton, Weil Gotshal, and Sidley Austin – to provide tips, The Wall Street Journal and other media outlets reported. The firms haven’t been charged, but what a mess to explain to their clients.
“Everyone charged today is accused of scoring significant profits from expected market moves and making out like bandits,” said Ted Docks, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division.
Insider trading is a move straight from The White Collar Playbook.
Is this what they teach at Yale Law School, where Nourafchan graduated? Or is this what you’ve got to do to pay off your student loans? For his part, Nourafchan hasn’t commented or pleaded to the charges. Several other defendants have already pleaded guilty.
Somehow, these brilliant lawyers at the top of our economic system traded messages with easy to crack code words, like “rabbi,” and “flight” and “surgery.”
Prosecutors got a hold of their messages and heard their phone calls. Rabbi meant target company. Flight meant timing. And surgery meant closing. Some examples cited in the indictment:
“I really need to know when the rabbi is scheduled for surgery.”
“We are all just waiting for you to tell us when the next flight to Israel is.”
“It’s coming soon.”.
“It’s to the moon.”
Or it could be to prison for up to 25 years, where they might see the moon through steel bars.
