Cravath Staffer Charged With Insider Trading Tied to Paramount Deal
Federal prosecutors say a longtime Cravath document specialist traded on client secrets, including Paramount's deal for Warner Bros. Discovery.
A longtime employee of Cravath, Swaine & Moore, one of Wall Street’s best-known corporate law firms, was arrested in New York on Thursday, Nov. 12, and charged with insider trading. Prosecutors allege he used confidential information about the firm’s clients to trade ahead of major deals, including Paramount Skydance’s roughly $110 billion acquisition of Warner Bros. Discovery.
The man, Chetram Balli of Queens, New York, who also goes by “Tony,” is accused of making more than $70,000 in profits from trades placed between April 2025 and October 2026, according to Bloomberg Law. The Wall Street Journal also reported the profit figure of about $70,000. The allegations have not been proven in court, and Balli’s lawyers did not have a public response in the reports reviewed.
What prosecutors allege
The criminal complaint was filed in federal court in Brooklyn by the U.S. Attorney’s Office for the Eastern District of New York, which handles federal cases in Brooklyn, Queens, Staten Island and Long Island. According to Bloomberg Law, prosecutors say Balli used “non-public client information relating to upcoming partnerships, mergers, and planned acquisitions” to trade shares of at least five companies listed on the New York Stock Exchange or Nasdaq.
The most prominent example involves Paramount. The complaint alleges that Balli bought a final batch of Paramount shares roughly four hours before the company announced it had signed a “definitive merger agreement” to acquire Warner Bros. Discovery, Bloomberg Law reported. Cravath represented Paramount in that transaction, Law360 noted.
The complaint does not name the law firm. It describes his employer as a “major international law firm” with “an elite mergers and acquisitions practice,” according to Bloomberg Law, which identified the firm as Cravath through a public LinkedIn profile under Balli’s name listing him as a document processor there.
Joseph Nocella Jr., the U.S. attorney for the Eastern District of New York, said in a press release that Balli “repeatedly traded on inside information that he misappropriated from his employer,” Investment Executive reported. James C. Barnacle Jr., an official with the FBI, said Balli “allegedly turned privileged access into an illegal advantage,” according to Bloomberg Law.
A back-office role with a view of big deals
Balli worked as a document processing specialist at Cravath, where he had been employed since 1989, according to Investment Executive. His job involved preparing and submitting regulatory filings to EDGAR, the Securities and Exchange Commission’s electronic system where public companies post disclosures such as merger announcements and financial reports.
That kind of role gives staff early sight of market-moving documents before they become public, which is why law firms and banks typically restrict employees’ personal trading. Under U.S. law, trading on confidential information taken from an employer or its clients can be prosecuted as insider trading even when the trader does not work for the companies whose shares are bought.
Reports differed slightly on his employment status. Bloomberg Law described him as a longtime Cravath employee, while Law360’s headline called him a former staffer. Cravath did not immediately respond to a request for comment, Bloomberg Law said.
Parallel case from the SEC
The Securities and Exchange Commission, the main U.S. markets regulator, filed a separate civil lawsuit against Balli in the same Brooklyn federal court. According to Investment Executive, the agency is seeking court orders barring future violations, the return of alleged trading gains, and financial penalties. No amounts were specified.
The SEC said the investigation was started by its market abuse unit, a team that hunts for suspicious trading patterns, and relied on data from the consolidated audit trail, Investment Executive reported. The consolidated audit trail, known as CAT, is a large database that tracks orders and trades across U.S. stock and options markets, letting regulators link individual trades to the accounts that placed them.
What comes next
Balli was expected to make his first appearance before a federal magistrate judge after his arrest, according to the U.S. Attorney’s Office, as cited by Bloomberg Law. The reports did not say whether he had entered a plea or what bail conditions, if any, were set.
- Criminal case: brought by federal prosecutors in Brooklyn; a conviction would require proof beyond a reasonable doubt.
- Civil case: brought by the SEC, seeking an injunction, disgorgement of alleged profits and penalties.
- Alleged trading window: April 2025 to October 2026, involving at least five listed companies.
For Cravath, which advises some of the largest companies in the world on mergers and litigation, the case is an unwelcome spotlight on how confidential deal information is handled inside elite law firms. The firm has not publicly commented on the charges.
