Charges were unsealed on Wednesday in connection with a decade-long insider trading scheme involving 30 defendants, including corporate attorneys and other financial professionals, according to a release from the Massachusetts District Attorney’s Office.
Nineteen of the defendants were arrested on Wednesday and are set to appear in court in various cities across the US. Two of the defendants, according to the Massachusetts DA, are located in Russia and Israel and considered fugitives.
“With today’s arrests, the FBI has dismantled a large-scale, decade-long, international organized criminal network of corporate attorneys and financial professionals who are accused of stealing and trading on material, non-public information from several of our nation’s leading law firms, including one right here in Massachusetts,” said Ted E. Docks, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division.
“Everyone charged today is accused of scoring significant profits from expected market moves and making out like bandits… Anyone who engages in insider trading fundamentally undermines the trust necessary for our financial markets to function.”
The defendants are alleged to have stolen and used confidential information on nearly 30 merger and acquisition deals from several premier US law firms.
The release included a 2022 text exchange between two of the defendants, Gavryel Silverstein and Simon Fensterszaub, using coded language. “How’s the rabbi??” Fensterszaub asked, allegedly referring to a deal involving iRobot. “He’s stable,” Silverstein responded. “U shouldn’t be worried.”
Both Silverstein and Fensterszaub are among 16 defendants charged with two counts of conspiracy to commit securities fraud, two counts of securities fraud, and one count of conspiracy to commit money laundering.
“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,” said United States Attorney Leah B. Foley.
“If the American people believe that trading is only for the connected, they will keep their investment and retirement savings out of the markets, which will hurt our economy. Today’s charges, the result of a years-long investigation with our law enforcement partners, are part of my office’s ongoing efforts to ensure a level playing field for all investors.”