Citigroup to pay $30 million for selectively releasing report

Oct. 3, 2013 at 4:15 PM
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BOSTON, Oct. 3 (UPI) -- Massachusetts authorities said Citigroup Inc. would pay a $30 million fine for handing out a report on an Apple Inc. supplier before it was made public.

The Secretary of the Commonwealth of Massachusetts levied the fine against the bank, which did not admit to breaking the law, but conceded the state's statement of acts was correct, The Wall Street Journal reported Thursday.

Authorities said former Citigroup market analyst Kevin Chang had given an unpublished research report concerning Hon Hai Precision Industry to institutional clients a day ahead of its release to the public.

Chang, who worked for a Taiwanese affiliate of Citigroup, was fired in September, the Journal said.

Allegedly, the report was made available to SAC Capital, T. Rowe Price, Citadel and GLG Partners. In addition, three Citigroup employees sold Apple stock after the research report was given to the select group of clients, but before it went public, authorities said.

"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," said Secretary of the Commonwealth of Massachusetts William Galvin in a statement.

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