Here’s What Citigroup Owes Over Leaked Apple Secrets
Massachusetts’ securities regulator has hit Citigroup (NYSE:C) with a $30 million fine due to an analyst’s leak of confidential information about one of Apple’s (NASDAQ:AAPL) suppliers, reports The Street. In December 2012, Citigroup research analyst Kevin Chang gave several different clients an early look at a research report about Apple supplier Hon Hai Precision Industry before it was publicly released.
Hon Hai Precision Industry, also known as Foxconn, is a major supplier for Apple’s iPad and iPhone products. The report included updated production numbers for Hon Hai that resulted in Apple being downgraded by Citigroup from a “Buy” to a “Neutral” rating.
According to the state’s order, the recipients included T. Rowe Price, Citadel, GLG Partners, and three units of SAC Capital. SAC Capital is also currently the target of a separate investigation into other insider trading violations. The order also noted that several Citigroup employees made Apple stock sales based on the unreleased information in the research report.
“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,” said William Galvin, the Secretary of the Commonwealth of Massachusetts via The Street.
Although Citigroup admitted no wrongdoing, it released a statement regarding the allegations.
“We take our regulatory compliance requirements very seriously and train all of our employees about these obligations. We are also constantly working to improve, manage and monitor the compliance and controls process,” said Citigroup spokesperson Sophia Stewart.
Here’s how Apple traded on Friday.
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