Aug 12, 2019

Junior RBC Analyst Charged With Insider Trading

SeekingTheta's picture
SeekingTheta CF
Rank: Orangutan | 292
Subscribe

Did anyone see this story that just came out? Stud first-year out of NYU charged with insider trading. The idiot bought calls on EFI right before their acquisition by Siris Capital. What a fucking moron, only made $100K as well.

Log in or register to post comments
  • 18

WSO Elite Modeling Package

  • 6 courses to mastery: Excel, Financial Statement, LBO, M&A, Valuation and DCF
  • Elite instructors from top BB investment banks and private equity megafunds
  • Includes Company DB + Video Library Access (1 year)
learn more

Comments (83)

Add comment
 
Aug 12, 2019 - 3:35pm

Also from the article:

:

In a November 2017 interview with the Stern School website, Tsai was asked what advice he would give to first-year students.
"Hold on to your values," he answered, according to the website. "I think the biggest thing is that you learn so many things in school. That's a beautiful part of the school, but it's to figure out what you believe in."
-
  • 24
 
Aug 12, 2019 - 4:42pm

Classic NYU "values"where people give each other study materials with incorrect answers to sabotage their grades. Source: My NYU tour guide (!!!), even if only directionally true, a huge red flag and I ran as far and as fast away from that school as possible

Be excellent to each other, and party on, dudes.
  • 9
 
Aug 12, 2019 - 9:55pm

https://www.stern.nyu.edu/programs-admissions/undergraduate/stern-advan…

What is it like being the Student Council President, and what do you hope to accomplish?

  • 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. 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.

LOL, and yikes..how long before this student interview profile mysteriously disappears from Stern's website

Authored by: Certified Venture Capital Professional - Vice PresidentCertified Venture Capital Pro
  • 15
 
Aug 12, 2019 - 4:38pm

The trader is an idiot, he had access to non-public information and wasted his time to make off money when other people didn't know.

"It's okay, I'll see you on the other side"
 
Aug 12, 2019 - 4:51pm

For a profit of less than his first-year salary.

Be excellent to each other, and party on, dudes.
  • 2
 
Aug 13, 2019 - 8:25pm

Easy now, he was an investment banker, not a trader ;)

Did you know that JRR Tolkien stands for Jolkien Rolkien Rolkien Tolkien?
  • 1
 
Aug 12, 2019 - 5:18pm

Poor kid. No one knows what he was thinking, but my guess is that he convinced himself that the information he was trading on wasn't material non public. I don't know how else you explain the fact that he doesn't appear to have even tried to cover his tracks.

 
Aug 13, 2019 - 5:31pm

Here's another theory, since we all seem to be okay with armchair psychoanalyzing this guy: With his resume and ambition he believed that he was entitled to something far bigger and better than an analyst role at RBC.* So when the universe didn't deliver him what in his estimation should have been his, he just took it.

*Note: I work with RBC a lot and think it's a great firm populated by very competent and honest bankers.

  • 1
  • 1
View 1 reply
 
Aug 12, 2019 - 5:22pm

Not even $100k. That's a short term capital gain, so after taxes he probably netted about $70k. Or would have.

 
Aug 13, 2019 - 3:44pm

Billy Tsai the insider trading guy!

Few players recall big pots they have won, strange as it seems, but every player can remember with remarkable accuracy the outstanding tough beats of his career.
  • 8
 
Aug 14, 2019 - 12:31am

"You know the Fed's listening, n***a what money?" - DJ Khaled

Few players recall big pots they have won, strange as it seems, but every player can remember with remarkable accuracy the outstanding tough beats of his career.
  • 6
 
Aug 13, 2019 - 6:38pm

Money never sleeps, pal. Just made $98,750 on EFI. It's been wired to you. Play with it. You've done good, but you gotta keep doing good. I've showed you how the game works. Now School's out.

Oh shit wire me that money back I need to make bail

What concert costs 45 cents? 50 Cent feat. Nickelback.

  • 6
 
Aug 13, 2019 - 6:39pm

Money never sleeps, pal. Just made 3,074,581 in Taiwan Dollars. It's been wired to you. Play with it. You've done good, but you gotta keep doing good. I've showed you how the game works. Now School's out.

Be excellent to each other, and party on, dudes.
  • 1
 
Aug 14, 2019 - 12:06am

Pooring one out for the old boy, Billy Tsai. God speed baby

Few players recall big pots they have won, strange as it seems, but every player can remember with remarkable accuracy the outstanding tough beats of his career.
  • 1
 
Aug 18, 2019 - 7:05pm

I've been keeping my eyes peeled for that posting.
Hasn't been posted yet. Not sure if they will post the job opening.

thots & prayers

 
Aug 14, 2019 - 12:07am

Corporate M&A

Few players recall big pots they have won, strange as it seems, but every player can remember with remarkable accuracy the outstanding tough beats of his career.
 
Aug 14, 2019 - 12:07am

He's taping out

Few players recall big pots they have won, strange as it seems, but every player can remember with remarkable accuracy the outstanding tough beats of his career.
 
Aug 15, 2019 - 1:40pm

The SEC has numerous algorithms and data analytics tools that will flag anything that seems like illicit behavior. It was an Easy catch for them - a banker who hasn't traded much from an account decides to randomly spend 30K one day on something very niche.

Hedge Fund Pitch for Interviews
View 1 reply
 
Aug 15, 2019 - 1:35pm

He bought a shit load of calls 48 hours before a merger announcement? And FINRA/SEC know he works as a coverage analyst for the investment bank advising on the deal? How he got caught is the easy question to answer. The real mystery is how did this moron traverse through the interview/internship process well enough to be brought on full time.

Authored by: Certified Investment Banking Professional - NACertified Investment Banking Pro
  • 2
 
Aug 15, 2019 - 6:03pm

More like:

Stern -> RBC (terminated) -> Ricker's Island Capital

"I went in with a bachelors in marijuana and came out with a doctorate in cocaine" - George Jung

Few players recall big pots they have won, strange as it seems, but every player can remember with remarkable accuracy the outstanding tough beats of his career.
  • 2
View 1 reply
 
Aug 15, 2019 - 7:14pm

What if his personal trading account in which he made $100k was only a bait for the SEC? What if he planned his arrest all along? What if he pocketed $10+M from another hidden account and is now laughing at all of us?

Honestly, I feel that we are missing a big piece of the story - just doesn't seem plausible that he was this dumb.

Array
 
Aug 16, 2019 - 1:21am

Why would he need bait if he had a hidden account all along? Are you seriously suggesting this dude purposely planned his own arrest and invited a firestorm of suspicion by one of the most powerful regulatory agencies in the world because he had another account they somehow wouldn't notice?

Sometimes people really are just this dumb. Look at people like raj rajaratnam and rajat gupta. Some of the biggest names in industry were caught because of their own stupidity.

Financial Modeling Courses
 
Aug 18, 2019 - 9:55pm

Haha. I'm sure you and your uncle are both smart, intelligent people. But this is like the most wrong thing I've ever read. I would wager that the SEC only catches 0.000001% of people that trade on inside information. That is why the DOJ/SEC love to make such a big deal of it when they do catch someone.

If everyone that does this were caught, don't you think we would hear about them more often? Look at target share prices during the weeks leading up to merger announcement. Do you think its merely a coincidence that they generally begin to creep up noticeably? Insider trading is a stupid thing to do because there is hell to pay if you're caught. But let's be honest: this is a low probability (assuming youre not an imbecile like the RBC analyst), high cost proposition.

Authored by: Certified Investment Banking Professional - Vice PresidentCertified Investment Banking Pro
  • 1
 
Aug 19, 2019 - 2:30pm

You make some good points, and we really will never know, but the counterpoint is that the only way to really profit from inside information is with short dated, deeply out of the money options on an underlying stock that's publicly traded.

Could you buy the common? Yeah, you could, but with a typical takeover premium averaging about 30% that's your maximum gain, and the tax man's going to take 12 percentage points. So you're risking ruin and prison for an 18% gain, and only on as much principal as you can invest in that stock.

And because it simply doesn't make sense for people to buy way out of the money options in general, let alone just happen to buy them right before a merger or consequential earnings announcement, it's neither resource intensive nor difficult for the SEC to connect the dots between anyone making such mysteriously profitable trades and the people/firms with inside information.

  • 1
 
Aug 16, 2019 - 1:14pm

The ones who get away with it probably don't use short dated OTM options haha

Array

Related Content

See more
Start Discussion

Popular Content See all

Total Avg Compensation

January 2021 Investment Banking

  • Director/MD (9) $911
  • Vice President (31) $349
  • Associates (141) $232
  • 2nd Year Analyst (88) $152
  • 3rd+ Year Analyst (19) $150
  • Intern/Summer Associate (90) $144
  • 1st Year Analyst (349) $132
  • Intern/Summer Analyst (299) $82
Access IB Report

Career Resources

Leaderboard See all

1
LonLonMilk's picture
LonLonMilk		 98.5
2
Jamoldo's picture
Jamoldo		 98.4
3
Secyh62's picture
Secyh62		 98.3
4
CompBanker's picture
CompBanker		 97.9
5
redever's picture
redever		 97.7
6
frgna's picture
frgna		 97.6
7
Edifice's picture
Edifice		 97.5
8
NuckFuts's picture
NuckFuts		 97.5
9
Addinator's picture
Addinator		 97.5
10
bolo up's picture
bolo up		 97.5