When we first covered the sweeping 30-person insider trading indictment targeting attorneys at the nation’s premier law firms, we noted that the unnamed co-conspirators still lurking in the indictment meant the story wasn’t fully told yet. We were right.
When the DOJ unsealed charges against 30 people Wednesday in connection with a decade-long insider trading ring centered on Yale Law grad and serial Biglaw firm-hopper (Sidley Austin, Latham & Watkins, Cleary Gottlieb, and Goodwin Procter) Nicolo Nourafchan, we noted that the indictment referenced unnamed co-conspirators who worked at Biglaw firms as recently as this year. Turns out some of those names were hiding in plain sight, in separately unsealed documents.
Meet Gabriel Gershowitz. A former Willkie Farr & Gallagher counsel, Gershowitz is one of the 30 people charged, but additional unsealed documents reveal he and eight others had already pleaded guilty and are cooperating with the government. Gershowitz isn’t a mystery figure. The SEC identified him in its parallel civil suit as one of Nourafchan and Yadgarov’s recruits, a college classmate of theirs who went on to Columbia Law School and subsequently worked at a number of large firms, including Weil Gotshal & Manges, DLA Piper, and Willkie Farr & Gallagher.
The details of his alleged participation are specific and damning. While at Willkie, Gershowitz was staffed on the Enstar deal because his firm was advising Sixth Street on its roughly $5 billion acquisition of Enstar. He shared news of the deal with his former classmates, who told him a few days later they had purchased between $2 million and $3 million in Enstar shares. After the deal was announced, Gershowitz was allegedly due a $30,000 kickback (though he received a smaller amount because he owed Yadgarov money he’d borrowed for apartment renovations).
Due to his ongoing cooperation, prosecutors have agreed to recommend a sentence of two years for Gershowitz.
There’s one more wrinkle worth noting. After Reuters reported on the Gershowitz court filing, which had been unsealed along with the rest of the case documents on Wednesday, the document was quietly removed from the public court docket in Gershowitz’s case. No explanation has been offered for why a document that was made public was subsequently pulled.
Willkie responded with a statement, “Willkie is aware that a former employee is alleged to have engaged in conduct that would constitute a severe violation of our clear and well-defined compliance policies, which we take seriously and enforce across the firm. There are no allegations of wrongdoing against the firm, which has and will continue to cooperate fully with the investigation of this matter.” Weil Gotshal, another of Gershowitz’s former employers, also weighed in, noting that the former employee “has not been associated with the firm for over six years and the transaction involved dates back to 2019,” adding that Weil was “among the victims of the alleged scheme” and had cooperated fully with prosecutors.
Then there’s Wachtell. Among the co-conspirators described in one of the indictments was a Yale classmate of Nourafchan’s who worked at the firm that advised Anadarko Petroleum on its $55 billion acquisition by Occidental Petroleum in 2019 and Tim Hortons in its $11 billion takeover by Burger King in 2014. That firm was Wachtell Lipton Rosen & Katz. For a firm that built its entire identity on institutional discretion and handling the most sensitive deals in American corporate life, having a former attorney named as a co-conspirator in a scheme to monetize exactly that access is not a great look. Wachtell’s statement was unsurprisingly terse, “The responsible party left Wachtell Lipton over four years ago. There are no allegations of wrongdoing against the firm. Wachtell Lipton has cooperated fully with the US Attorney’s office and will continue to do so.”
What the fuller picture reveals is a scheme that was essentially a corruption of the old-boy network that already pervades elite law — the same college friendships, the same law school pipelines, the same firm relationships, turned toward the systematic monetization of client confidences. Nourafchan and Yadgarov didn’t recruit strangers. They recruited relatives, friends, classmates, and associates, people they trusted, people who trusted them, people connected through elite institutional threads.
As U.S. Attorney Leah Foley put it: “The trading on unannounced financial news alleged here not only violated the securities laws, but it also took advantage of the special access and ethical duties that come with a law license.”
Kathryn Rubino is a Senior Editor at Above the Law, host of The Jabot podcast, and co-host of Thinking Like A Lawyer. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter @Kathryn1 or Bluesky @Kathryn1
The post The Biglaw Insider Trading Scheme: Now With More Biglaw! appeared first on Above the Law.
When we first covered the sweeping 30-person insider trading indictment targeting attorneys at the nation’s premier law firms, we noted that the unnamed co-conspirators still lurking in the indictment meant the story wasn’t fully told yet. We were right.
When the DOJ unsealed charges against 30 people Wednesday in connection with a decade-long insider trading ring centered on Yale Law grad and serial Biglaw firm-hopper (Sidley Austin, Latham & Watkins, Cleary Gottlieb, and Goodwin Procter) Nicolo Nourafchan, we noted that the indictment referenced unnamed co-conspirators who worked at Biglaw firms as recently as this year. Turns out some of those names were hiding in plain sight, in separately unsealed documents.
Meet Gabriel Gershowitz. A former Willkie Farr & Gallagher counsel, Gershowitz is one of the 30 people charged, but additional unsealed documents reveal he and eight others had already pleaded guilty and are cooperating with the government. Gershowitz isn’t a mystery figure. The SEC identified him in its parallel civil suit as one of Nourafchan and Yadgarov’s recruits, a college classmate of theirs who went on to Columbia Law School and subsequently worked at a number of large firms, including Weil Gotshal & Manges, DLA Piper, and Willkie Farr & Gallagher.
The details of his alleged participation are specific and damning. While at Willkie, Gershowitz was staffed on the Enstar deal because his firm was advising Sixth Street on its roughly $5 billion acquisition of Enstar. He shared news of the deal with his former classmates, who told him a few days later they had purchased between $2 million and $3 million in Enstar shares. After the deal was announced, Gershowitz was allegedly due a $30,000 kickback (though he received a smaller amount because he owed Yadgarov money he’d borrowed for apartment renovations).
Due to his ongoing cooperation, prosecutors have agreed to recommend a sentence of two years for Gershowitz.
There’s one more wrinkle worth noting. After Reuters reported on the Gershowitz court filing, which had been unsealed along with the rest of the case documents on Wednesday, the document was quietly removed from the public court docket in Gershowitz’s case. No explanation has been offered for why a document that was made public was subsequently pulled.
Willkie responded with a statement, “Willkie is aware that a former employee is alleged to have engaged in conduct that would constitute a severe violation of our clear and well-defined compliance policies, which we take seriously and enforce across the firm. There are no allegations of wrongdoing against the firm, which has and will continue to cooperate fully with the investigation of this matter.” Weil Gotshal, another of Gershowitz’s former employers, also weighed in, noting that the former employee “has not been associated with the firm for over six years and the transaction involved dates back to 2019,” adding that Weil was “among the victims of the alleged scheme” and had cooperated fully with prosecutors.
Then there’s Wachtell. Among the co-conspirators described in one of the indictments was a Yale classmate of Nourafchan’s who worked at the firm that advised Anadarko Petroleum on its $55 billion acquisition by Occidental Petroleum in 2019 and Tim Hortons in its $11 billion takeover by Burger King in 2014. That firm was Wachtell Lipton Rosen & Katz. For a firm that built its entire identity on institutional discretion and handling the most sensitive deals in American corporate life, having a former attorney named as a co-conspirator in a scheme to monetize exactly that access is not a great look. Wachtell’s statement was unsurprisingly terse, “The responsible party left Wachtell Lipton over four years ago. There are no allegations of wrongdoing against the firm. Wachtell Lipton has cooperated fully with the US Attorney’s office and will continue to do so.”
What the fuller picture reveals is a scheme that was essentially a corruption of the old-boy network that already pervades elite law — the same college friendships, the same law school pipelines, the same firm relationships, turned toward the systematic monetization of client confidences. Nourafchan and Yadgarov didn’t recruit strangers. They recruited relatives, friends, classmates, and associates, people they trusted, people who trusted them, people connected through elite institutional threads.
As U.S. Attorney Leah Foley put it: “The trading on unannounced financial news alleged here not only violated the securities laws, but it also took advantage of the special access and ethical duties that come with a law license.”
Kathryn Rubino is a Senior Editor at Above the Law, host of The Jabot podcast, and co-host of Thinking Like A Lawyer. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter @Kathryn1 or Bluesky @Kathryn1
