AI startup CEO pleaded guilty in US to trading on insider tips from lawyers

• Bolurfrushan generated about $954,000 in trading profits, including $950,000 from trading on confidential information about Orchard Therapeutics' acquisition by Kyowa Kirin in 2023, sharing roughly $60,000 with the lawyers who provided tips
• Nine other defendants also pleaded guilty in proceedings before the May indictments were announced, while attorneys Steven Nourafchan and Robert Yadgarov pleaded not guilty and await trial
• The scheme involved lawyers accessing confidential merger documents at their firms and sharing information with traders in exchange for a cut of profits, including details about Sixth Street's $5.1 billion acquisition of Enstar in 2024

Summary

Key Development:

Arya Bolurfrushan, founder and CEO of Abu Dhabi-based AI startup AppliedAI and former Goldman Sachs banker, secretly pleaded guilty in June 2025 to securities fraud conspiracy. Court documents were unsealed Monday revealing his participation in a large-scale insider trading scheme involving attorneys at major law firms.

Financial Details:

• Bolurfrushan's illegal trades generated approximately $954,000 in profits
• Prosecutors recommend a 2-year prison sentence and forfeiture of $954,496
• He paid approximately $60,000 in kickbacks to the attorneys who provided tips
• The scheme involved at least 30 defendants across multiple law firms

The Scheme:

Bolurfrushan received confidential merger information from attorneys at Sidley Austin, Latham & Watkins, and Goodwin Procter. He was recruited into the operation in 2023 while in Dubai through connections to attorney families. Tips were provided by attorneys who accessed confidential deal documents, then shared information in exchange for a cut of trading profits.

Specific Transactions:

• September 2023: Traded on Kyowa Kirin Co Ltd's planned acquisition of Orchard Therapeutics, generating $950,000 in profits
• Mid-2024: Traded on Sixth Street's $5.1 billion acquisition of insurer Enstar

Legal Status:

Nine other defendants pleaded guilty before indictments were announced in May. The U.S. Securities and Exchange Commission settled civil claims against Bolurfrushan on Monday. Two key co-conspirators, attorneys Nourafchan and Robert Yadgarov, pleaded not guilty and await trial.

Market Implications:

The case highlights ongoing vulnerabilities in safeguarding confidential M&A information at major law firms and raises concerns about insider trading networks operating internationally.