The AI CEO who traded on secrets his lawyers were paid to keep

Marilyn kept a manila folder in the second drawer of her kitchen desk. Inside it were her brokerage statements, printed once a quarter because she did not trust the cloud, and a photograph of her sister Diane taken at the beach in 1974. Diane had a genetic disease Marilyn could not pronounce until she was fifty. That was the year Marilyn bought her first shares of Orchard Therapeutics.

She bought a hundred. Then another hundred. She was sixty-eight, retired from thirty-one years of teaching sixth grade in Worcester, and she had decided, quietly, that if the company ever found the therapy Diane needed, she wanted to have been on the boat when it left the dock. That was how she thought about it. Not as a trade. As standing witness.

In October 2023, GSK announced it would acquire Orchard for about $1.05 billion. The stock jumped. Marilyn saw the number on her phone before her tea was cold and let herself smile at the kitchen window. She thought the market had finally rewarded a person who had been patient.

She did not know that other people had not been patient. She did not know that other people, according to federal prosecutors in Boston, had been reading the deal binder in a partner's office weeks before she read the press release on her phone.

I.

There is a room in every large law firm where the deals live. The binder is on the desk. The draft merger agreement is on the screen. The blinds are closed because the view of the harbor is not the point. Inside that room, a small number of lawyers know a very specific thing: on a specific date, one public company is going to buy another public company at a specific price.

That knowledge is worth money. It is worth money the way a bank vault combination is worth money. The entire premise of the American securities market is that the combination stays inside the room.

According to the indictment unsealed in the District of Massachusetts, the combination did not stay inside the room.

Prosecutors allege that Nicolo Nourafchan, a former mergers and acquisitions attorney who moved through Sidley Austin, Latham & Watkins, and Goodwin Procter over the course of his career, ran a decade-long scheme in which confidential merger information was pulled from nearly thirty corporate deals and passed to a ring of traders. Prosecutors say the ring made tens of millions of dollars. Nourafchan pleaded not guilty on June 2, 2026, along with fourteen other defendants. Those allegations have not been proven.

But some of the people at the receiving end of the pipe have already told the government it was real.

II.

Arya Bolurfrushan is the founder and chief executive of AppliedAI, an artificial intelligence startup based in Abu Dhabi. Before he started the company he worked at Goldman Sachs. On his public profile he is a builder of the future.

On Monday, July 7, 2026, the clerk in Boston unsealed a document that told a different story. According to the court record, Bolurfrushan had already pleaded guilty. He had done it in June 2025. He had done it in secret and the docket had stayed sealed for over a year while the government worked the rest of the case.

He admitted to trading on confidential information leaked out of the law firms. He admitted, in the plea, that he had benefited financially. The specific dollar amount he made has not been publicly detailed. The deals named in the filings include the Orchard Therapeutics acquisition and the acquisition of the insurance and reinsurance company Enstar.

Read that sentence again. The deals named in the filings include Orchard Therapeutics.

III.

This is a good place to define what insider trading actually is, because most people who use the phrase do not quite know.

Insider trading is when a person buys or sells a stock using material non-public information. Material means it would move the price. Non-public means the market has not been told. If you know a company is about to be bought at a premium, and the rest of the market does not, and you buy shares before the announcement, you have stolen from every person who sold to you at yesterday's price. They sold because they did not know. You bought because you did. That is the crime.

The crime is not exotic. It is one of the oldest on the securities books. What is worth noticing in this case is not the crime. It is the pipe.

The pipe ran, according to the government, through the offices of law firms whose names sit on the letterhead of half the deals in America. Sidley Austin. Latham & Watkins. Goodwin Procter. Wachtell, Lipton, Rosen & Katz. Weil, Gotshal & Manges. Willkie Farr & Gallagher. These are not boiler rooms. These are the rooms where the country's confidential business is supposed to be kept.

One of the alleged tippers, Gabriel Gershowitz, practiced at Willkie Farr and at Weil Gotshal. He shared college years with Nourafchan and with another alleged co-orchestrator, Robert Yadgarov. Gershowitz has pleaded guilty and is cooperating with the government. Yadgarov has pleaded not guilty.

The friendship is not incidental. It is the mechanism. The pipe was built out of people who had known each other since they were nineteen years old.

IV.

Marilyn did not lose money on the Orchard deal. She made money on it. That is what makes this case difficult to explain at a kitchen table, and it is why I want to explain it carefully.

She made money because the stock went up when the acquisition was announced. Everyone who held the stock into the announcement made money. That was the public event.

What she did not get was the price she would have gotten if the market had been fair. In the weeks before the announcement, according to the pattern prosecutors describe, people who already knew the deal was coming were buying. Every share they bought pushed the price up a little. Every share they bought was a share Marilyn or someone like her could have bought cheaper, the day before, if the information had been where it was supposed to be. Inside the room.

The theft is not visible on her statement. The theft is in the shape of the chart before the announcement. It looks like ordinary drift. It is not ordinary drift. It is the sound of the combination being read aloud outside the vault.

That is the part most people miss. Insider trading does not empty your account. It reaches into the space between what you paid and what a fair market would have charged you, and it takes the difference. Then it does that thirty times across thirty deals over a decade, and the difference adds up to tens of millions of dollars, and the people who took it buy penthouses and fund AI startups and hire publicists.

V.

The AppliedAI angle is the part the headlines will chase. AI startup CEO pleads guilty. The framing suggests the fraud has something to do with the technology.

It does not. The fraud in this case is as old as the securities laws. There is no algorithm in the indictment. There is no model. There is a man who used to work at Goldman Sachs, who allegedly received tips from lawyers, who allegedly traded ahead of announcements, and who now runs a company that puts the words artificial intelligence on the door.

The AI part is the wrapper. The wrapper is what got the coverage when the company launched, and the wrapper is what will get the coverage now that the founder has pleaded. What is underneath the wrapper is the same thing that was underneath the wrappers in the 1980s and the 1990s and the 2000s. A guy with access. A friend with a binder. A trade nobody was supposed to see.

I have watched a lot of wrappers in forty years. The wrapper is always new. The room is always the same room.

VI.

The docket in Boston is thick now. Nine guilty pleas so far, counting Bolurfrushan and the eight unsealed on May 6, 2026. Fifteen defendants pleaded not guilty on June 2. Joseph Suskind, a Florida-based insurance adjuster who prosecutors allege made about $3 million from tips, has pleaded not guilty through his attorney. Lorenzo Nourafchan, Nicolo's brother, who runs a fractional CFO firm, has pleaded not guilty. The trials, if they happen, are ahead.

The law firms have said nothing publicly that resolves the question of how the pipe was allowed to run for as long as prosecutors say it ran. The compliance systems inside those buildings exist for exactly this. The prosecutors' theory is that the systems did not catch it. That is the theory. That is not yet the finding.

VII.

Marilyn does not read the Boston federal docket. She reads the local paper and she watches the evening news and every quarter she prints her statement and puts it in the manila folder next to the photograph of Diane at the beach.

If somebody tells her the news this week, she will read it and shrug. She made money on Orchard. She got what she came for. The stock did what she hoped it would do.

That is the part that may be the saddest. The mark in an insider trading case usually never knows she was the mark. The money that was taken from her was taken from the price she paid, not from the balance she watches. The theft is invisible on the statement she keeps in the drawer.

The predator across the table did not need her to lose. He only needed her not to be looking.

The wrapper says AI. The room says the same thing every room has said for forty years. Somebody knew. Somebody told. Somebody traded. And the person at the kitchen table, holding the folder, thinking she was standing witness, was standing in front of a pipe.

She just could not see where it ended.