A little more than a year removed from being Student Council President at New York University’s Stern School of Business, a recent grad was charged earlier this week by federal prosecutors for insider training. Bill Tsai, who was working as a junior analyst at RBC Capital Markets in New York City, was charged, according to an announcement from the U.S. Securities and Exchange Commission (SEC) on August 12. Tsai, who is originally from Taiwan, served as Student Council President at Stern during his senior year. He graduated in 2018.
The charge states that Tsai traded with knowledge of Siris Capital Group’s plans to acquire Electronics for Imaging before that knowledge was public. A criminal suit was also filed in the Southern District of New York for one count of securities fraud, which carries a maximum prison sentence of 20 years.
“According to the SEC’s complaint filed in federal court in Manhattan, Bill Tsai, a junior investment banker in the bank’s New York office, learned of the acquisition when Siris consulted the bank about providing financing and advice on the transaction,” a media release from the SEC states. “The SEC alleges that soon after learning about the deal, Tsai purchased EFII call options, which he sold for a profit of approximately $98,750 shortly after the deal was announced in mid-April 2019.”
TSAI ALLEGEDLY ‘REAPED NEARLY $100,000’ BY ‘MISUSING HIGH CONFIDENTIAL INFORMATION’
According to the release, Tsai allegedly attempted to hide the illegal activity by trading in a brokerage account, which he hid from RBC Capital Markets. According to Bloomberg reporting, RBC has suspended Tsai.
“As alleged in our complaint, Tsai reaped nearly $100,000 in illicit profits by misusing highly confidential information entrusted to him,” Joseph G. Sansone, Chief of the SEC Enforcement Division’s Market Abuse Unit also said in the media release. “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.”
NYU Stern photo
TSAI’S ADVICE FOR STERN FRESHMEN AS PRESIDENT: ‘HOLD ON TO YOUR VALUES’
Growing up in Taiwan, Tsai went to an international school and sought out NYU because of its similar international and diverse student body, according to a profile about Tsai on Stern’s website. Tsai said in the profile his two main goals as Student Council President were to bring more health and wellness resources for students and use the student council as a platform to connect underclassmen with upperclassmen. Ironically, Tsai also spoke about how being the Student Council President naturally put a “spotlight” on him and that he should conduct himself accordingly.
“I think it’s a role that is bigger than advertised. When you see people around, when people look at you, they think that is what NYU Stern is,” Tsai said in the profile. “And what I’ve realized is – and what I’ve been told as well – is that even when I walk around as Bill Tsai instead of NYU Stern President, I am still NYU Stern President. Like whatever I do, the title follows. And you have to be very aware of that a spotlight is on you, and conduct yourself accordingly.”
Again, ironically, when asked to give advice to NYU Stern freshmen, his response was to “hold on to your values.”
“Hold on to your values. I think the biggest thing is that you learn so many things in school,” Tsai said in the profile. “That’s a beautiful part of the school, but it’s to figure out what you believe in. And then, when you meet all these people outside, you still stay true to yourself. You stay humble, you stay eager.”
REPORTEDLY RELEASED ON $100,000 BAIL
Tsai has reportedly been released on a $100,000 bail as he awaits trial for the civil suit filed by Manhattan-based U.S. Attorney Geoffrey S. Berman.
“In April of this year, Bill Tsai made a quick profit by trading options in a publicly traded company he knew was about to be acquired,” Berman said in the civil suit announcement. “His profits were not the result of trading acumen, diligent research, or blind luck, but rather, as alleged, the product of theft of confidential information from his employer. For his alleged conduct, he now faces federal securities fraud charges.”
The civil case brought against Tsai is U.S. v Tsai, 19-cr-7464, U.S. District Court, Southern District of New York (Manhattan) and the full text of the accusations and charges can be found here. The SEC case is SEC v. Tsai, 19-cv-7501, U.S. District Court, Southern District of New York (Manhattan).
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