A former equity trader at TIAA has been sentenced to nearly six years in prison after admitting he and a co-conspirator used insider information to rake in approximately $47 million in ill-gotten gains.
According to court documents, Lawrence Billimek allegedly profited from his advance access to certain TIAA trades, which he knew were likely to move a stock’s price due to the sheer size of the $1.3 trillion asset management giant.
From at least 2016 until he was arrested in December 2022, Billimek allegedly provided inside information on TIAA’s impending securities trades to his co-conspirator Alan Williams, the former head equity trader at an unnamed firm described in an indictment only as a “large investment firm.” Williams then allegedly acquired or sold the securities ahead of the TIAA trades.
In return for the inside information, Williams are accused of providing Billimek with a cut of the profits on the trades, which the two allegedly conducted more than 1,000 times. They also purportedly tried to hide their communications by using so-called “burner” phones that were prepaid and unregistered.
Among the trades made using insider information, Williams engaged in a short sale of Lululemon Athletica stock in June 2020, just before TIAA sold off shares in the company. In February 2022, per the indictment, Williams profited from being tipped off by Billimek about TIAA’s impending acquisition of shares of Chinese online retailer Vipshop. And in August 2022, Williams engaged in another short sale, this time in shares of Match Group just before TIAA sold off a “substantial number” of shares in the dating company.
“Lawrence Billimek shamelessly abused his position, orchestrating an insider trading scheme that pocketed tens of millions in illicit gains,” Damian Williams, U.S. Attorney for the Southern District of New York, said in a statement. “Billimek thought that hiding his conduct behind burner phones and lies would shield him from detection from law enforcement. He was mistaken.”
The suspect Alan Williams was apparently a victim of his own success as his intraday trading was called “spectacularly profitable” in the indictment, as compared with other securities trading he conducted. This raised flags among officials who found that Williams’ intraday trading was profitable more than 90% of the time, which was in sharp contrast to his non-intraday trading, an activity that resulted in a net loss over the relevant period.
In a parallel case, the SEC said it was able to uncover William’s fraudulent trading and identify how he profited by repeatedly front-running large trades by Billimek’s employer, through analyzing trading using the Consolidated Audit Trail database. The database tracks orders throughout their life cycle and identifies the broker-dealers handling them, which is intended to allow regulators to track securities activity in all U.S. markets.
In addition to a 70-month prison term, Billimek was sentenced to three years of supervised release and ordered to pay more than $12.2 million.
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Tags: Alan Williams, Consolidated Audit Trail database, Damian Williams, indictment, Insider Trading, Lawrence Billimek, Lululemon, Match Group, Southern District of New York, TIAA, Vipshop