SEC Charges Investment Banking Analyst with Insider Trading

The Securities and Exchange Commission today charged an analyst at a large international investment bank with insider trading based on confidential information that he learned about Siris Capital Group's plans to acquire Electronics for Imaging, Inc. (EFII). 

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. 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 attempted to hide his illegal activity by conducting his trading in a brokerage account that he concealed from his employer, and by circumventing the bank's policies that require employees to pre-clear securities trades.

"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."

In a parallel action, the U.S. Attorney's Office for the Southern District of New York today announced criminal charges against Tsai.

The SEC's complaint charges Tsai with violating the antifraud provisions of the federal securities laws and seeks disgorgement of ill-gotten gains plus interest, penalties, and injunctive relief.

The SEC's investigation, which is continuing, has been conducted by Melanie A. MacLean, David Oliwenstein, and Simona Suh of the Market Abuse Unit, with assistance from John Rymas in the Market Abuse Unit's Analysis and Detection Center, and Jordan Baker and James D'Avino from the New York Regional Office. The case has been supervised by Mr. Sansone. The SEC's litigation will be led by Ms. MacLean, Mr. Oliwenstein, and Ms. Suh. 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.