Law Firm Insider Trading Charges Highlight Risks of Confidential Corporate Information

A long-serving employee at a major international law firm has been charged with insider trading after allegedly using confidential information obtained through his employment to profit from upcoming corporate transactions.

On November 12, 2026, the US Attorney's Office for the Eastern District of New York announced criminal charges against Chetram Balli, 54, a document processing specialist who had worked at the unnamed law firm since approximately 1989.

Federal prosecutors allege that Balli used nonpublic information concerning mergers, acquisitions and corporate partnerships to trade shares in companies listed on the New York Stock Exchange and Nasdaq.

The criminal complaint alleges that the trading generated more than $70,000 in profits between April 2025 and October 2026.

The Securities and Exchange Commission (SEC) has also filed a separate civil action.

The allegations highlight an important corporate security concern: employees who are not senior executives can nevertheless have legitimate access to highly sensitive commercial information.

How the Alleged Insider Trading Scheme Worked

According to federal prosecutors, Balli's responsibilities involved creating and revising complex legal documents and preparing regulatory filings for submission through the SEC's Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system.

His position provided access to confidential information about transactions involving the firm's corporate clients.

Prosecutors allege that Balli used this information to purchase shares before relevant announcements became public.

Once the transactions were announced, he allegedly sold the shares at a profit.

The complaint identifies trading involving five publicly listed companies, including E2open Parent Holdings, Forge Global Holdings, Paramount Skydance, Talkspace and Pacira BioSciences.

One example concerns Balli's alleged purchase of approximately 14,866 shares in E2open on May 12, 2025.

Less than two weeks later, WiseTech Global announced an agreement to acquire E2open in a transaction valued at approximately $2.1 billion.

The proposed acquisition represented a 28% premium to E2open's previous closing share price.

Prosecutors allege that Balli subsequently sold his shares following the public announcement.

The charges remain allegations. Balli is presumed innocent unless proven guilty.

The Risk of Confidential Information Access

The case is particularly significant because the accused employee was not a senior lawyer, director or executive.

His role involved supporting legal professionals through document preparation and regulatory filing processes.

These responsibilities can require access to information that is commercially sensitive, even when the employee is not responsible for making strategic decisions.

Major law firms routinely handle confidential information concerning:

• Proposed mergers and acquisitions.
• Corporate restructuring.
• Financial transactions and investment agreements.
• Regulatory filings and planned announcements.
• Commercial disputes and settlements.
• Confidential business negotiations.
• Material information concerning publicly traded companies.

Access to such information is necessary for many legitimate administrative, technical and professional responsibilities.

However, organisations need to consider whether employees can access information beyond what their specific duties require.

The issue is not simply whether someone has permission to access confidential material, but whether the access is appropriately limited, monitored and used for its intended purpose.

Why Insider Risks Extend Beyond Senior Management

Organisations often concentrate their security arrangements on executives, senior management and individuals with direct control over financial transactions.

However, employees performing administrative and support functions may also encounter commercially valuable information.

Document processing specialists, executive assistants, IT personnel, finance employees and external contractors can all require access to sensitive information in the course of their duties.

The potential risk arises when that access is deliberately misused.

A previous Conflict International USA article examined insider financial crime involving a former TD Bank employee, highlighting how legitimate internal access can be exploited to facilitate fraudulent financial activity.

The latest law firm allegations present a different concern: the potential misuse of confidential client information for personal securities trading.

This distinction matters because the controls required to protect financial transactions may differ from those needed to safeguard sensitive corporate documents.

How the SEC Identified Suspicious Trading Activity

The SEC's investigation originated within its Market Abuse Unit, which examined trading activity using data from the Consolidated Audit Trail.

This system provides regulators with detailed information about securities orders and transactions across US markets.

According to the SEC, investigators used trading data to identify and analyse activity potentially connected to confidential corporate announcements.

The regulator alleges that Balli engaged in insider trading on at least eight occasions between May 2025 and October 2026.

Its civil complaint estimates approximately $55,000 in illicit profits, compared with the more than $70,000 alleged in the federal criminal complaint. The figures reflect the respective allegations and should not be treated as established financial findings.

The investigation demonstrates how transaction records can assist authorities in identifying unusual trading patterns and examining potential connections between market activity and access to nonpublic information.

However, suspicious trading activity does not automatically establish insider trading.

Investigators must assess the available evidence, including timing, knowledge, relevant communications and applicable legal requirements.

The Importance of Internal Investigations

Where organisations identify possible misuse of confidential information, establishing the facts may require a structured internal investigation.

Relevant questions can include whether the individual had legitimate access to the information, when that access occurred and whether there is evidence of unauthorised use or disclosure.

Depending on the circumstances, enquiries may involve reviewing:

• Relevant document access and activity records.
• Corporate communications and correspondence.
• Employment responsibilities and access permissions.
• Document creation and modification histories.
• Relevant personal or corporate relationships.
• Internal policies and confidentiality obligations.
• Potential conflicts of interest.
• Information obtained through appropriate legal processes.

An investigation should distinguish between authorised access, suspected policy violations and evidence of potentially unlawful conduct.

Not every unusual access event indicates wrongdoing, and conclusions should not be based solely on circumstantial information.

Where allegations may result in regulatory proceedings or litigation, early coordination with legal counsel is particularly important.

Preserving Electronic Evidence

Electronic records can become central to investigations involving the suspected misuse of confidential information.

Documents may contain metadata showing when files were created, modified or accessed.

System logs may provide information about account activity, while relevant communications can help establish the sequence of events surrounding a suspected incident.

However, electronic evidence must be handled carefully.

Unnecessary access, deletion or alteration of records can complicate subsequent investigations and create questions about reliability.

Where litigation or regulatory action is reasonably anticipated, organisations should consider appropriate preservation measures under the guidance of legal counsel.

Professional Litigation Support can assist legal teams with factual enquiries, evidence development, relevant background research and the examination of information connected to complex disputes.

Such assistance should complement, rather than replace, legal advice and specialist forensic procedures where required.

Strengthening Confidentiality Controls

The allegations provide an opportunity for businesses and professional services firms to assess how confidential information is managed.

Organisations should consider whether employees have access only to information relevant to their responsibilities and whether appropriate controls exist around particularly sensitive transactions.

Potential safeguards include:

• Role-based access to confidential documents.
• Regular reviews of employee and contractor permissions.
• Appropriate logging of sensitive information access.
• Clearly defined confidentiality and securities trading policies.
• Staff training concerning material nonpublic information.
• Procedures for reporting potential conflicts of interest.
• Defined escalation routes for suspected misconduct.
• Appropriate evidence preservation and incident response procedures.

These arrangements should be proportionate to the organisation's activities and applicable regulatory requirements.

The objective is not to create unnecessary restrictions on employees performing legitimate duties.

It is to ensure that sensitive information is protected through appropriate organisational controls and accountability.

What the Case Means for Law Firms and Corporate Clients

Law firms frequently handle information that can influence significant commercial decisions and financial markets.

Their clients depend on that information being managed confidentially and appropriately.

The allegations involving Balli demonstrate why information security must extend throughout an organisation, including departments responsible for document preparation and administrative support.

Businesses outside the legal sector face similar considerations.

Corporate finance teams, investment advisers, technology companies and organisations preparing major transactions may all handle information with considerable commercial value.

Ensuring that confidential records are appropriately protected is therefore a wider corporate governance issue.

Where concerns emerge, an independent and evidence-led investigation can help establish what occurred and whether further action is justified.

How Conflict International USA Can Assist

Conflict International USA provides Litigation Support, Corporate Intelligence and specialist investigative services to law firms, businesses and professional advisers.

Our services can assist clients requiring independent factual enquiries, relevant background research, corporate relationship analysis and evidence development in connection with suspected misconduct or commercial disputes.

Where matters involve confidential information, employee conduct or potential litigation, we can work alongside legal counsel to establish an appropriate investigative scope.

Through our international network, we can also coordinate enquiries involving individuals, companies or relevant records across multiple jurisdictions.

Our approach focuses on proportionate investigation, independent verification and clear reporting that distinguishes established facts from allegations and unconfirmed information.

If your organisation requires assistance with suspected internal misconduct, sensitive corporate enquiries or complex legal proceedings, contact Conflict International USA to discuss your requirements in confidence.