One year after graduating, Stern alumnus Bill Tsai was arrested for leveraging his position at an investment bank to illegally make almost $100,000 off the stock market — something he pleaded guilty to last month, according to court documents.
Tsai worked as a junior analyst at RBC Capital Markets after graduating, where he learned that private equity firm Siris Capital Group would buy a digital printing technology company, Electronics for Imaging. Tsai proceeded to buy 187 EFI call options before it was announced that Siris acquired them — something that increased the stock value from $29.40 to $38 per share, allowing Tsai to make an estimated $98,750, according to court documents. Tsai’s use of non-public knowledge to make a profit off of the stock market violates his employment agreement with RBC and resulted in his arrest.
On Sept. 19, Tsai pleaded guilty to the charges against him in federal criminal court. He is also expected to settle a civil lawsuit by the Securities and Exchange Commission, according to court documents.
“In recent weeks, we have engaged in productive settlement discussions with defendant Tsai, who also pled guilty in the Criminal Case on September 19, 2019,” SEC attorney Melanie A. Maclean wrote in a letter to the judge. “Based on these discussions, we anticipate being able to resolve this matter through a settlement.”
Sentencing in the criminal case against Tsai is set for Jan. 17 of next year. Tsai’s Initial Pretrial Conference for the civil case, during which the status of his case will be reviewed, is set for Jan. 8.
A version of this article appeared in the Monday, Nov. 11, 2019 print edition. Email Victor Porcelli at [email protected]