Citigroup Fined $2 Million After Analysts Blab To Press About Facebook, Google
The Facebook IPO debacle continues to cost money and scalps. And, once again, as with every Wall Street scandal, dumb emails are involved. Thank you, Wall Street, for never learning your lesson on that one.
The other, more serious lesson from this particular episode is that the way Wall Street communicates with investors and the public is still a giant mess, nearly a decade after regulatory reforms meant to clean that mess up.
Citigroup on Friday agreed to pay $2 million to settle charges by the Massachusetts Secretary of the Commonwealth William F. Galvin that it had failed to properly supervise its analysts, one of whom allegedly disclosed confidential information about Facebook ahead of its disastrous May IPO.
Citi has also fired Mark Mahaney, a senior analyst covering Internet companies including Facebook and Google, the Wall Street Journal reported. Mahaney was not cited by name in Galvin’s complaint, but a “senior analyst” matching Mahaney’s description was discussed early and often — including several dumb emails.
Last month, Citi also fired an unnamed junior analyst who, according to Galvin’s complaint, disclosed confidential information about Facebook to a couple of TechCrunch bloggers before the IPO. And, you guessed it, that junior analyst sent some dumb emails! (AOL is the parent company of both TechCrunch and The Huffington Post.)
SOURCE: Huffington Post.