“Insider trading case exposes gaps in law firm security” —

• “An insider-trading scheme unveiled this week by federal prosecutors in Boston laid out what looked like the perfect crime of opportunity. Corporate lawyers allegedly mined internal law‑firm systems for deal secrets and tipped accomplices to earn tens of millions of dollars off well‑timed trades.”
• “Based on the information in the indictments, the insider tips the lawyers gleaned didn’t require breaking through any doors, physically or metaphorically: they had access by virtue of working at ​the law firms. The sprawling scheme includes 30 defendants and has ensnared some of the most elite law firms in the country, including Latham & Watkins; Wachtell, Lipton, Rosen & Katz; and Goodwin Procter. The law firms haven’t ‌been accused of wrongdoing and are considered victims by prosecutors.”
• “One could argue that no internal security system can guard against every bad actor, but law firms have reason to know better at this point. Reading the indictment, it struck me that I’ve seen versions of this scam before — many times.”
• “Over the last dozen years, several well-known corporate law firms have been embroiled in similar insider-trading scandals involving information employees nabbed from internal databases. Those cases should have served as a wake-up call for law firms that they needed to do more to secure their internal systems.”
• “In the days of banker boxes full of documents, locked conference ​rooms kept files secure, and law firms trusted their partners to uphold their ethical duties to clients. Law firms have invested heavily in security in recent years, in part out of fears of cyberattacks. That doesn’t always help, however, when the ​threat comes from inside.”
• ‘The reality is you cannot really eliminate insider risk or access to sensitive data,’ said Avi Sambira, a director at cybersecurity firm Sygnia. While a stray document on a printer or ⁠overheard watercooler chatter can always be a risk, the biggest internal vulnerability these days stems from who has permission to access internal documents housed on law firm servers. Cybersecurity professionals and lawyers I spoke to said law firms have grown more sophisticated over the last ​decade in how they restrict such data, often granting permission matter-by-matter rather than more broadly to everyone who shares a client or practice group.”
• “‘Firms having access to something doesn’t mean everyone should have access equally,’ said Devon Ackerman, an executive at cybersecurity firm LevelBlue. Instead, he ​said, permissions should be granted on a ‘need-to-know’ basis.”
• “A pair of indictments and a related Securities and Exchange Commission civil case filed this week suggest that lawyers determined to access insider information can find gaps in the system.”
• “The scheme spans a decade and centers around Nicolo Nourafchan, a deal lawyer who worked at Sidley Austin, Latham & Watkins and Goodwin Procter. Notably, prosecutors allege he repeatedly obtained access to documents related to sensitive M&A deals that he was not assigned to work on, including a draft merger agreement, diligence review tracker, timeline and signing checklist.”
• “Prosecutors say he even accessed documents 10 days after he was ​terminated from what the indictment calls Law Firm B, while on a leave of absence from Law Firm C, and on the day he turned in his firm-issued laptop at a firm.”
• “In one telling detail, ​the SEC complaint alleges that in 2018, Nourafchan told a co-conspirator that ‘he searched the system using key words and viewed documents in preview or read-only mode so as to minimize any electronic trail of his access to the files.’ Nourafchan’s co-conspirators at one point marveled at the ‘genius’ of his ‌going into deal ⁠work at large firms, to help enable the trades, according to court filings.”
• “For law firms, setting tight restrictions on internal documents can be tedious, requiring hundreds of individual permissions to be granted and constantly monitored. Looking for anomalies in who is opening documents is tricky, cybersecurity professionals said, but AI and other technology is continually evolving to help.”
• “Everyone I spoke to stressed that even with state-of-the-art technology and protocols, human behavior can be hard to outwit. ‘You can’t have a completely foolproof system no matter what steps you take,’ said Stephen Frank, a former securities fraud prosecutor now at Quinn Emanuel Urquhart & Sullivan, speaking generally and not about the new case. Law firms ⁠undoubtedly try to avoid ​such incidents, Frank said, because when breaches happen, ‘those are a lot of very uncomfortable conversations to be having with clients.’”

“Exclusive: Acting AG Todd Blanche was told last year to recuse from Justice Department matters involving Trump” —

• “It was less than two weeks after Todd Blanche took on his role of deputy attorney general in March 2025 when the Justice Department’s top ethics lawyer delivered some straightforward yet inconvenient news: His recusal from legal cases that involved President Donald Trump in his personal capacity was necessary.”
• “The official conducting the briefing, Joseph Tirrell, handed Blanche and his then-top deputy Emil Bove, who was also in the conference room, a printed PowerPoint presentation on ethics, according to a former senior Justice ethics official who described the meeting to CNN.”
• “The meeting, which hasn’t previously been reported, is the first time Blanche was formally informed he would need to recuse himself from cases involving Trump. Around the same time, the department’s top career lawyer advised that Bove potentially had a conflict of interest by being involved in firings of DOJ lawyers.”
• “Recusal, however, is a word that comes with treacherous consequences in the Trump era — including in the case of former Attorney General Jeff Sessions who Trump tormented after he recused himself from overseeing what eventually became the Mueller investigation. Blanche’s choice is either to oversee investigations the president cares deeply about but risk damaging their viability in court or to recuse himself and risk incurring the president’s wrath.”
• “Now serving as acting attorney general, Blanche finds himself in an ethical quandary. His previous role representing Trump in criminal prosecutions brought by the Justice Department means that he is switching sides, overseeing the department’s investigation of the former government officials whom Trump claims unfairly used the criminal justice system to target him. “
• “That includes some who were connected to the prosecutions of Trump for mishandling classified records in Florida after his first term, and allegedly conspiring to overturn his loss in the 2020 presidential election. Blanche was Trump’s primary defense lawyer in both federal court cases, which were dismissed prior to being fully resolved in court.”
• “Blanche signed the department’s ethics pledge laid out to him by Tirrell, according to the former ethics official who spoke to CNN and a document submitted to the Office of Government Ethics. That pledge included requirements for Blanche to not participate for at least a year in any of the department’s matters involving past clients of the Blanche Law Group, the small private law firm Blanche used to represent Trump in the criminal cases. The department’s regulations also prohibit his participation ‘in any criminal investigation or prosecution if he has a personal or political relationship’ with anyone who was involved in or has an interest in that investigation or prosecution. “
• “A Justice Department spokeswoman said Wednesday that Blanche is complying with ethical obligations.”
• “The potential conflict is more acute now that Blanche has installed Joe diGenova, a former US attorney for DC, to reinvigorate an investigation into what diGenova has outlined as a broad conspiracy against Trump spanning from the 2017 Russian election interference probe to the aborted Special Counsel Jack Smith prosecutions that ended in 2024.”
• “DiGenova is based in Fort Pierce, Florida, a federal court with few major criminal cases aside from Trump’s. Among those targeted for possible prosecution is John Brennan, the former CIA director — a top priority for Trump in his efforts to prosecute his political foes. Brennan denies wrongdoing. Last week, a spokesperson told CNN Blanche had not recused himself from the investigation into Brennan, which the department has repeatedly declined to comment on.”
• “‘It was typical in past administrations for senior officials to solicit advice,’ especially when conflicts of interest were a close call, Benjamin Grimes, the former deputy director of DOJ’s Professional Responsibility Advisory Office, said recently.”
• “The conflicts of interest aren’t uncommon.”
• “During the Biden administration, Deputy Attorney General Lisa Monaco recused herself from investigations of President Joe Biden’s alleged mishandling of classified documents, which didn’t result in charges, and an investigation of Hunter Biden. Monaco had served in the Biden transition team and during the Obama administration worked closely with the vice president. An internal memo recorded her recusal but wasn’t made public.”
• “During the George W. Bush administration, Attorney General John Ashcroft recused himself from the investigation into the leak of former CIA operative Valerie Plame’s identity. He cited his close political relationship with President Bush and other top administration officials who would be potential witnesses in the probe.”
• “But the Justice Department during the second Trump term has broken with many past institutional norms, including the traditional separation between the White House and the department.”
• “In his first press conference as acting attorney general, Blanche notably remarked, ‘I love you, sir,’ to Trump.”

“Quinn Emanuel Just Got a $3 Million Ethics Lesson. A Judge Made Them Write It Themselves” —

• “On Tuesday, Judge Edward M. Chen of the US District Court for the Northern District of California dropped a $3 million sanctions order on Quinn Emanuel stemming from the firm’s representation of Natera Inc. in a pharma advertising case, and the opinion is the kind of reading that should make every partner at that firm put down their coffee and stare at the wall for a while.”
• “The conduct of the firm and its litigation team, Chen wrote in adopting a special master’s recommendation, ‘implicates a culture of lawyering that is deeply disturbing.’ Not a rogue associate. Not an isolated lapse in judgment. A culture. ‘At virtually every juncture in this misadventure,’ Chen wrote, ‘these attorneys turned a blind eye to the truth, deliberately failed to exercise diligence, violated their duties of candor to the Court, and then attempted to justify it — without basis.’”
• “So what exactly happened at Quinn? Judge Chen opens his sanctions order not with dry legal findings, but with a narrative — a detailed, almost novelistic account of a mid-level associate at ‘a well-recognized law firm’ navigating a cascade of ethical failures over the course of a year. It reads like a Professional Responsibility exam hypothetical. At the end of four pages, he pulls back the curtain: ‘This is not a Professional Ethics issue spotter. These are the facts of Quinn Emanuel’s conduct in the instant litigation.’”