SEC Obtains Final Judgment Against Investment Banking Analyst for Insider Trading

Litigation Release No. 24732 / January 31, 2020

Securities and Exchange Commission v. Tsai, No. 1:19-cv-07501 (S.D.N.Y. filed August 12, 2019)

On December 16, 2019, the Honorable Gregory H. Woods of the U.S. District Court for the Southern District of New York entered a final consent judgment against a former junior investment banker whom the SEC charged with insider trading.

According to the SEC's complaint, filed on August 12, 2019, Bill Tsai, then a junior analyst in the New York office of a large international investment bank, learned through his work for the bank that Siris Capital Group was planning to acquire Electronics for Imaging, Inc. (EFII). 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 agreed to settle with the SEC and consented to the entry of a judgment permanently enjoining him from violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and ordering him liable to pay disgorgement of his ill-gotten trading profits, with interest, which will be offset by the amount of any forfeiture ordered against Tsai in a parallel criminal action. In a separate administrative proceeding instituted on December 23, 2019, Tsai consented to be barred from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization, and from participating in any penny stock offering.

On the same day the SEC filed its action against Tsai, the U.S. Attorney's Office for the Southern District of New York announced parallel charges against him. Tsai pleaded guilty in the criminal action, and in January 2020 he was sentenced to five years of probation and ordered to forfeit approximately $126,000.

The SEC's investigation was conducted by Simona K. Suh of the SEC Enforcement Division's Market Abuse Unit and by Debbie Chan of the New York Regional Office, with assistance from John Rymas of the Unit's Analysis and Detection Center.  The case was supervised by Joseph G. Sansone, Chief of the Market Abuse Unit.  The SEC appreciates the assistance of the U.S. Attorney's Office for the Southern District of New York, the Federal Bureau of Investigation, and the Financial Industry Regulatory Authority.