Ex- Wachtell Lawyer Linked to Insider Trading Case, Sources Say

The Unindicted Co-Conspirator in a Major Insider Trading Case

A former attorney at Wachtell, Lipton, Rosen & Katz has been identified as an unindicted co-conspirator in a large-scale insider trading case involving tips from lawyers on corporate mergers. According to two sources familiar with the matter, this individual is Avi Sutton, who previously worked at the law firm and later joined the investment bank LionTree.

Sutton, who was an associate at Wachtell from 2013 to 2022, was not named in the indictments but is referenced as "CC-2" in one of the legal documents. He joined LionTree in 2022 as general counsel and chief operating officer. The investment bank, which focuses on technology, media, and telecommunications deals, issued a statement on Friday regarding the situation.

LionTree's Response

LionTree stated that the individual in question was immediately placed on leave and is no longer active at the firm. The company also mentioned that it is aware of the filing identifying it as one of many victims in the alleged scheme. However, there are no allegations of wrongdoing against the firm itself.

The indictment, which was unsealed on Wednesday, charges 30 individuals involved in a decade-long insider trading conspiracy. Prosecutors have indicated that prominent law firms and a boutique investment bank were among the victims of the scheme, which generated tens of millions of dollars in illegal profits.

Wachtell, one of Wall Street's most prominent law firms, confirmed that it was among the law firms listed as victims by prosecutors. The firm issued a statement that did not identify Sutton as the lawyer in question but noted that the individual had left the firm more than four years ago.

The Decade-Long Scheme

Prosecutors allege that from 2014 to 2024, attorneys at major law firms obtained and misappropriated confidential details about nearly 30 yet-to-be-announced merger deals, fueling an insider trading ring. The scheme was orchestrated by Nicolo Nourafchan, a corporate lawyer who worked at Sidley Austin, Latham & Watkins, and Goodwin Procter, and by personal injury attorney Robert Yadgarov.

Nourafchan and Yadgarov were among 19 people arrested on Wednesday. Eric Rosen, a lawyer for Nourafchan, declined to comment, while Yadgarov did not respond to requests for comment.

Several law firms involved in the case, including Goodwin and Latham, have confirmed their roles and described the alleged conduct as a violation of their trust and policies.

Sutton's Role in the Scheme

According to the indictment, lawyer CC-2, identified as Sutton, began providing tips about forthcoming M&A deals involving Wachtell's clients in 2014. The earliest example cited was in August 2014, when he tipped off about the potential acquisition of Canadian coffee and restaurant chain Tim Hortons, which Burger King announced days later it planned to buy.

Over the years, Sutton provided tips on deals involving Actelion, C.R. Bard, Qualcomm, Express Scripts, and others. After joining LionTree, he provided a tip in August 2023 about a potential deal involving eBay-backed online classifieds group Adevinta, as per the indictment.

Company Responses and Ongoing Investigations

LionTree and Wachtell were not named in the indictment, which referred to them as "Investment Bank A" and "Law Firm F." However, CryptoLiveDaily identified them based on their work on mergers described in the indictment, Sutton's LinkedIn page, and information from the two sources.

Wachtell confirmed its role as a victim of the scheme and emphasized that there are no allegations of wrongdoing against the firm. The law firm also stated that it has cooperated fully with the U.S. Attorney's office and will continue to do so.

A spokesperson for U.S. Attorney Leah Foley, whose office is prosecuting the case, declined to comment on the matter. The U.S. Securities and Exchange Commission has also filed a related civil case against several of the defendants.