By Nate Raymond
BOSTON, July 7 (Reuters) – The founder and chief executive of an AI startup secretly pleaded guilty last year to participating in a vast scheme in which attorneys at major law firms tipped traders about mergers their employers were advising on.
Court records unsealed on Monday show that Arya Bolurfrushan, a former Goldman Sachs banker who founded Abu Dhabi-based AppliedAI, pleaded guilty in June 2025 after striking a deal with federal prosecutors in Boston who were working to build cases against dozens of other people accused of participating in the long-running insider trading scheme.
Those individuals include Nicolo Nourafchan, who had worked at the law firms Sidley Austin, Latham & Watkins and Goodwin Procter before prosecutors in May unveiled charges against him and 29 other people accused of engaging in a scheme to profit from confidential information about mergers underway.
Bolurfrushan pleaded guilty to conspiring to commit securities fraud in a plea agreement where prosecutors agreed to recommend that he be sentenced to two years in prison and forfeit $954,496 he derived from the scheme.
Jordan Estes, his lawyer at Gibson, Dunn & Crutcher, declined to comment.
Nine other people also pleaded guilty in secret proceedings in the years before prosecutors announced the indictments.
Prosecutors say Bolurfrushan traded on tips passed along to him by Nourafchan and his partner, personal injury attorney Robert Yadgarov, in exchange for a cut of any trading profits.
Bolurfrushan had met the two lawyers through one of Nourafchan’s family members and was recruited into the scheme in 2023 while he was in Dubai, according to the U.S. Securities and Exchange Commission, which settled civil claims against Bolurfrushan in a related lawsuit on Monday.
Nourafchan and Yadgarov pleaded not guilty last month to securities fraud and other charges and are awaiting trial.
According to prosecutors and the SEC, Nourafchan, while working as an associate at Goodwin Procter, in September 2023 accessed electronic documents concerning a deal he was not working on, the planned acquisition of Goodwin’s client Orchard Therapeutics by Kyowa Kirin Co Ltd.
Nourafchan tipped Bolurfrushan off to the expected merger, allowing him to buy Orchard securities, authorities say. The SEC said he earned $950,000 in trading profits and passed along about $60,000 to Nourafchan and Yadgarov.
Bolurfrushan engaged in insider trading again in mid-2024, based on a tip about investment firm Sixth Street’s plans to acquire insurer Enstar for $5.1 billion, according to charging documents.
(Reporting by Nate Raymond in Boston; editing by David Bario and David Gaffen)
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