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Citigroup fined $30 million for leaking iPhone research
Citigroup is learning the hard way that leaking unpublished research on iPhone production numbers to institutional investors ahead of other investors is wrong. The company has been fined US$30 million for sending that data to SAC Capital, T. Rowe Price, Citadel and GLC Partners ahead of official publication that would have been available to all investors. All of the investment firms except GLC Partners used information gathered by Citigroup analyst Kevin Chang to sell off AAPL shares before the news hit the rest of the market. The day Chang's research was made public on December 14, 2012, Apple's share price fell 5.2 percent so the three institutional investors who acted on his research early saved themselves millions. The fine was levied in a consent order from the Secretary of the Commonwealth of Massachusetts, William Galvin, who noted, "It seems that the concept that investors are to be presented with a level playing field when it comes to the product of research analysts is a lesson that must be learned over and over again. But it's important that it should be taught as often as necessary." Citigroup was also fined last year when another analyst disclosed confidential information before Facebook's IPO. Chang has been fired from the company.
