The top securities regulator in Massachusetts has fined Citigroup $2 million, charging an analyst leaked confidential information about Face-book's initial public offering.
Citi agreed to the settlement without admitting or denying wrongdoing. It was part of the team of banks that helped underwrite the deal.
According to the regulator, a junior analyst in Citigroup's San Francisco office was assigned to help research Facebook.
On May 2, the junior analyst sent an email to two employees at the technology website TechCrunch.com, with proprietary information about Citigroup's research on Facebook.
"I am ramping up coverage on FB and thought you guys might like to see how the street is thinking about it [and our estimates]," the junior analyst wrote. A TechCrunch staffer wrote back: "There's no way I can publish this doc from an anonymous source, right?" The junior analyst replied: "My boss would eat me alive."
The analyst and TechCrunch employee were friends, and had gone to Stanford together.
Citigroup fired the junior analyst in September and told regulators he acted alone. Citi also agreed to review its policies for overseeing analysts' communications, and to strengthen compliance training.
