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Citigroup Fined $2 Million for Analysts’ Leaks

Not one, but two, confidential information leaks cost Citigroup Global Markets $2 million this week. In one case, a junior analyst shared confidential information about Facebook with the technology website TechCrunch.com just prior to the social media company’s IPO.

As part an investigation into problems associated with the flawed IPO, Massachusetts’ Securities Division also uncovered another case of leaks within the ranks of Citigroup analysts. Well-known information technology analyst Mark Mahaney apparently shared his financial outlook for YouTube with the French magazine Capital, and then later tried to cover up his actions.

Massachusetts’ jurisdiction in the case stems from a Consent Order signed by Salomon Smith Barney, later know as Citigroup Global Markets. The precursor to the 2003 Consent Order was the April 2003 Global Analyst Research Settlements whereby Citigroup Global Markets paid a $400 million settlement for providing fraudulent research reports and permitting inappropriate influence by investment bankers over research analysts.

Sources and Coverage:

Massachusetts Office of the Secretary of the Commonwealth Securities Division Consent Order in the Matter of Citigroup Global Markets Docket No. 2012-0900 
The Washington Post, via AP, Citigroup Analyst After Sharing Facebook Info with Tech Blog: ‘My Boss Would Eat Me Alive’
The New York Times DealBook, by Ben Protess and Randall Smith, Citigroup Pays Fine and Fires Star Technology Analyst
April 2003 SEC Fact Sheet on Globaly Analsyst Research Settlements 

Filed in: Corporate Weaseling, Fines and Settlements Tags: 

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