Citigroup Inc. (NYSE:C) is now the latest company to face a significant fine on the charge of premature publication of private analyst information. The news follows in the footsteps of similar lawsuits involving Morgan Stanley (NYSE:MS) and Goldman Sachs (NYSE:GS). According to The Wall Street Journal, the Commonwealth of Massachusetts fined Citigroup $30 million on Thursday after it concluded that one of its analysts, Kevin Chang, offered his clients research on Hon Hai Precision Industry, a major Apple (NASDAQ:AAPL) supplier, one day before the official report was publicly released.
In addition to the fine, the company is now also the subject of an investigation by the Financial Industry Regulatory Authority for the release of its research.
Citigroup came under the microscope early in 2013, after a securities regulator from Massachusetts found that Chang had released unpublished research information about Apple’s order figures in the year’s first quarter. The information about Hon Hai and its supply orders was given to a hedge fund and institutional clients one day before they were released to the public on December 15, and the three Citigroup clients who received the information executed sales of Apple stock in that crucial time period between receiving the information and the publication of the analyst’s official report.