Thanks to a weblog leak, the Facebook IPO is an even larger disaster than previously believed.
Monetary leviathan Citigroup fired star analyst Mark Mahaney over leaking confidential Facebook IPO study to TechCrunch and private YouTube forecasts to a French financial magazine, Capital. The leaks were flagged by the Massachusetts Securities Division, the state’s monetary regulator, which today issued a consent order (.pdf) and fined Citi $ 2 million for the disclosures.
In falling casualty to the Facebook IPO, Citigroup joins lead underwriter Morgan Stanley, Facebook itself, and the Nasdaq exchange, all of whom have seen their reputations tarnished as a outcome of the bungled stock debut this previous May. Thanks to aggressive pricing, final-minute disclosures, trading failures, and other problems, the Facebook IPO has turn out to be a sort of case study on how not to handle a huge securities supplying.
In the case of Citigroup, a single of Mahaney’s underlings e-mailed a draft analysis report on Facebook to two TechCrunch writers ahead of the social network’s IPO. When a single of the writers asked if the material could be published and attributed to an anonymous source, the underling responded, “my boss would consume me alive,” and asked for confidential feedback.
In a separate incident, Mahaney supplied economic predictions about YouTube to a journalist working for a French financial magazine, predictions which weren’t yet accessible to the public.
Provided that Citi took $ 476 billion in federal money and guarantees to keep away from going beneath in the financial crisis that began 4 years ago, the disclosures are hardly the only blemishes on the bank’s record. But they do indicate Citi nonetheless has a lot to find out about following basic industry rules.