RBC Junior Analyst Bill Tsai Faces Insider Trading Charges

August 12, 2019 | News, Private Equity

The recent NYU grad concealed a trading account from RBC Capital markets. He faces one count of securities fraud that carries a maximum 20-year prison term.

Bill Tsai was new to Wall Street.

He was the student body president at New York University’s Stern School of Business.

He also had a sweet gig at RBC Capital Markets as a junior analyst.

Now, he’s facing 20 years in prison for a single charge of securities fraud.

According to an SEC statement, the U.S. Attorney for New York’s Southern District alleges that Tsai used a personal trading account to make $98.750 in ill-gotten profits on insider knowledge after he “learned of [an] impending acquisition through his work.”

“His profits were not the result of trading acumen, diligent research, or blind luck,” U.S. Attorney Geoffrey Berman said in a statement.

RBC Capital Markets has suspended Tsai indefinitely. The company then issued a statement noting that it was cooperating with investigators.

“RBC has a zero-tolerance approach to any breach of the law or our code of conduct,” RBC Capital Markets spokeswoman, Sanam Heidary, told Bloomberg in a statement. “We have cooperated fully with law enforcement as it relates to this matter.”

The Charges Against Bill Tsai

According to the SEC, Tsai allegedly traded call options on a company called Electronics for Imaging (EFII).

The complaint suggests that Tsai had learned of confidential information that Siris Capital Group was planning to acquire the firm. After learning of the pending $1.7 billion deal, the SEC says that he paid $28,410 for the call options. The first transactions reportedly occurred on March 29.

The complaint also alleges that the junior analyst concealed his trading account from his employer.

The SEC says that after the companies announced the deal, shares rose 29.3%. Prosecutors later calculated that he nearly earned six figures on the deal and sold the call options less than two hours after the deal hit Wall Street.

The SEC noted that it wasn’t difficult to catch Tsai.

“As alleged in our complaint, Tsai reaped nearly $100,000 in illicit profits by misusing highly confidential information entrusted to him,” said Joseph G. Sansone, Chief of the SEC Enforcement Division’s Market Abuse Unit. “Using our enhanced analysis and detection capabilities, the SEC was able to act swiftly, exposing Tsai’s misconduct just months after his illegal trading took place.”

As we reported last week, the SEC has seen some turnover in its ranks.

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