This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Citigroup Fined $2 Million Over Facebook Disclosure

Stocks in this article: C FB

NEW YORK ( TheStreet) -- Massachussets fined Citigroup (C - Get Report) $2 million after its top technology analyst and an unnamed junior analyst improperly disclosed non-public material information about Facebook (FB - Get Report) prior to its IPO.

Citigroup was an underwriter in the Facebook IPO and its analysts were prohibited from disseminating any non-public information prior to the offer.

The bank fired its top technology analyst Mark Mahaney for the breach on Friday, the Wall Street Journal reported.

Mahaney is unnamed in the complaint although the filing does say the senior tech analyst was ranked as the no.1 internet analyst at Institutional Investor Magazine for the last four years.

The junior analyst was fired in late September, according to the regulator's filing.

The regulator's investigation revealed that the junior analyst had exchanged non-public information about Facebook with two employees at blog Tech Crunch.

The analyst said he was ramping up coverage on Facebook and wanted feedback from the employees on his analysis. "This is of course confidential," he said in the email sent from his work address.

The information included proprietary work of Mahaney that was material and non-public, the complaint said.

When Tech Crunch employees wished to know if it can publish the information with attribution to an anonymous source, the analyst said "My boss would eat me alive."

Mahaney, himself, was guilty of a breach of the firm's disclosure policy earlier, having shared his unpublished views about Google (GOOG) and YouTube to a French reporter.

When a Citi employee alerted him to the fact in an email and said he had submitted a post-interview approval request, he replied "This could get me in trouble. Shoot"

Ironically, Mahaney was previously with Galleon and was fired from that job for "not having enough edge," on stocks, according to an earlier WSJ report. . Galleon's co-founder Raj Rajaratnam is serving a 11-year sentence in prison for insider trading.

--Written by Shanthi Bharatwaj in New York

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,678.70 +6.10 0.03%
S&P 500 2,057.09 +5.27 0.26%
NASDAQ 4,771.7630 +13.8840 0.29%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs