The founder of the Abu Dhabi-based AI start-up AppliedAI has pleaded guilty in the US to taking part in a scheme to misuse confidential information about planned company takeovers. The case itself does not relate to the company’s activities in the field of artificial intelligence, but it illustrates just how important transparency and investor trust are for technology start-ups today.
Disclosed court documents reveal that Arya Bolurfrushan, a former Goldman Sachs banker and founder of AppliedAI, pleaded guilty as early as June 2025. However, the information has only now been made public, following the prosecution’s completion of the next stage of its investigation into an extensive insider trading network.
Prosecutors allege that Bolurfrushan received confidential information from lawyers working on mergers and acquisitions. He then used this information to trade shares, sharing a portion of the profits with those who provided the tips. As part of a plea bargain, he pleaded guilty to conspiracy to commit securities fraud. The prosecution is set to recommend a two-year prison sentence and the forfeiture of $954,496 obtained from the scheme.
One of the cases described was the takeover of Orchard Therapeutics by the Japanese company Kyowa Kirin. According to the US Securities and Exchange Commission (SEC), Bolurfrushan made approximately $950,000 from this transaction, passing on part of the profits to those providing the information. The documents also point to further transactions linked to the planned takeover of the insurer Enstar by the Sixth Street fund.
The investigation covers a much wider group of individuals. In May, US prosecutors charged 30 participants in the alleged scheme, some of whom had previously also secretly pleaded guilty. Two lawyers regarded as key figures in the case deny the charges and are awaiting trial.
Although the charges relate to the founder’s private activities, the case may affect AppliedAI’s reputation. The start-up has raised over $60 million in funding from reputable investors and has announced a series of new business partnerships in recent months. This raises questions as to whether investors and partners were aware of the earlier settlement and what consequences this may have for the company’s future development.
