An employee at the white-shoe law firm Cravath, Swaine & Moore was charged with insider trading on Thursday after prosecutors said he bought and sold shares of companies that the firm represented before transactions that increased their value.
Chetram Balli, a longtime document processor at Cravath, used his access to confidential information about upcoming mergers and acquisitions to make about $70,000 in illicit profits off the trades, prosecutors said.
The trades, which he executed between April 2025 and October 2026, involved five companies listed on the New York Stock Exchange, including Paramount, which had been in the process of acquiring Warner Bros. Discovery.
Mr. Balli “repeatedly traded on inside information that he misappropriated from his employer and his employer’s clients,” Joseph Nocella Jr., the U.S. attorney in Brooklyn, said in a statement.
In total, Mr. Balli traded on the shares of at least 20 companies, including Nvidia and Intel, prosecutors said. But prosecutors were not able to determine whether Cravath was involved with those companies’ transactions.
If convicted, Mr. Balli faces up to 20 years in prison. His lawyer did not immediately respond to a request for comment. Fallon Szczur, a spokeswoman for the firm, said Mr. Balli was no longer employed there and had not been a member of its legal staff. Cravath is not accused of any wrongdoing.
“Cravath is working in full cooperation with the authorities investigating the matter,” Ms. Szczur said.
Mergers and acquisitions are one of the most profitable areas for Cravath, one of the country’s most prestigious law firms. Over the past decade, Cravath has represented clients in mergers and acquisitions with a combined value of more than $4 trillion, according to the firm.
Mr. Balli, 54, had been employed at the firm since 1989, according to federal prosecutors, and had a job that often involved preparing and submitting filings to the Securities and Exchange Commission. At times, he had access to information about upcoming transactions that, when announced, would significantly change the share price of the companies involved.
In one such instance, prosecutors said, Mr. Balli used his knowledge about the upcoming acquisition by Charles Schwab, a financial services company, of a data services company, in a deal valued at $660 million. A major shareholder of the data services company was a Cravath client.
The day before the acquisition was announced, Mr. Balli bought shares worth $33,000. A few days after the announcement, he sold and made a profit of about $22,000.
Prosecutors said Mr. Balli also tried to make a profit off Paramount’s acquisition of Warner Bros. Discovery, which was valued at $111 billion and created a media and entertainment behemoth. Cravath represented Paramount in the deal.
According to prosecutors, Mr. Balli used illicit profits from a different deal, involving a behavioral health care company that was being acquired by a hospital operator, to purchase Paramount shares before the Warner Bros. acquisition was announced.
He then sold his Paramount shares to buy more shares of the health care company, which he sold for a profit of roughly $6,000, prosecutors said.
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