According to news emerging from the financial world today, Citi has signed a consent order with the Massachusetts Secretary of State. The company has agreed to pay a $30 million fine after its analysts leaked information on Apple’s iPhone supply chain to several large clients.
Citigroup analyst Kevin Chang emailed unpublished research about Hon Hai Precision Industry Co, a major supplier of Apple Inc iPhones, to SAC, T. Rowe Price, Citadel and GLG Partners, according to William Galvin, Massachusetts’ Secretary of the Commonwealth.
Chang’s research reportedly included lower order forecasts for Apple’s iPhones in the first quarter of 2013. Consequently, an impact was soon apparent. SAC, hedge fund Citadel and mutual fund firm T. Rowe Price, for example, all sold Apple stock after receiving the information from Chang.
“At $30 million,” Reuters reports, “the Massachusetts fine is both one of the biggest state securities regulators have ever collected and 15 times the $2 million they fined Citi for improperly disclosing research on Facebook’s initial public offering only a year ago.”