US charges that three M&A lawyers exploited client secrets for financial gain raise questions as to how they got hired at seven different Big Law firms over the course of their alleged crime spree.
One of the three, Nicolo Nourafchan, worked at Sidley Austin, Latham & Watkins and Goodwin Procter between 2013 and 2023, federal indictments allege. After four years at Sidley, Latham brought him on and fired him after about two years. Goodwin next gave him a job before dismissing him in a couple years.
He allegedly committed crimes at all three firms. Neither the indictments nor statements from Latham and Goodwin indicate the firms had knowledge of the alleged criminal activity. Latham and Goodwin didn’t immediately respond to requests for comment about why they fired Nourafchan.
“There’s kind of a presumption that you’re working with honest folks in the vetting process because of the other higher powers outside of an employer who have stronger investigatory tools and more incentives to catch this stuff,” said Mathew Brown, a Washington DC-based legal recruiter. “A little skepticism about asking folks hard questions might be warranted going forward.”
The allegations highlight how several large law firms can be dragged into wide-reaching white collar criminal investigations by a few bad actors. Big Law attorneys frequently change firms in today’s hiring market, and if they’ve been involved in illegal activity, recruiters say, it’s not always easy to filter them out.
“There’s no way, if you’re a firm of 1,500 lawyers, every lawyer you’re going to get is going to uphold their fiduciary duty to clients,” said Jon Truster, a New York-based recruiter with Macrae. “I don’t know how firms are supposed to control this.”
Nourafchan and co-conspirators are facing charges from federal prosecutors and the Securities and Exchange Commission for allegedly leveraging confidential details about corporate transactions handled by their wealthy corporate law firms to buy company securities.
One of the other defendants, Gabriel Gershowitz, who is cooperating with the federal investigation, also worked at three law firms over a roughly 15-year period—Weil, Gotshal & Manges, Willkie Farr & Gallagher, and DLA Piper. He allegedly stole information from each of them for insider trading.
A third, unnamed attorney worked at Wachtell, Lipton, Rosen & Katz from 2013 to 2022, according to the indictments. That person also leaked information illegally while employed there, prosecutors allege.
Brown said if firms are not aware of a lawyer’s crimes, it becomes “quite difficult” for a prospective employer to do any vetting that would catch any sort of criminal activity.
“If they’re fired for suspicious activity, that’s not criminal,” he said.
When previously reached for comment on the allegations, Latham said Nourafchan hasn’t worked at the firm for five years and that the alleged conduct would constitute a violation of its policies. Goodwin said it was “deeply disappointed” in the former employee and that it’s cooperating with law enforcement.
Latham in July 2020 told Nourafchan he would be let go in the following month, according to the federal documents. By the time he was fired he had already allegedly fed information about deals involving Care.com and Zagg to his co-conspirators, according to the indictment. After the firm notified him of the firing, he accessed confidential information about Momenta, the indictment states.
Within a year, Nourafchan got a job at Goodwin Procter. He worked there until September of 2023 when the firm fired him, the indictment states. During his time at the firm, Nourafchan allegedly used deal information about firm clients—including Citrix, and iRobot.
The firm told Nourafchan in June of 2023 it was firing him in September. That didn’t stop him from using confidential information about a potential acquisition of NextGen in August to help co-conspirators allegedly buy securities, according to the complaint.
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