logo
Sign in or Register

Already a member?

Sign in

Or sign in with your account on:

Not a member yet?

Register
    

Citigroup (C) Fined $30 Million for Leaking Confidential Information to SAC

  +Follow October 3, 2013 10:27AM
Share:
Tickers Mentioned:

Investment bank Citigroup (C) was hit with a $30 million fine for supplying secret information to several hedge funds in what appears to be an insider trading scheme concerning the stock of Apple, Inc. (AAPL) . Aside from T. Boone Price, Citadel, and GLC Partners, the most notable hedge fund included in the allegations is SAC Capital, the $15 billion fund that is already facing extensive criminal charges from the US government concerning “rampant insider trading.”

Investigators assert that analyst Kevin Chang from the Taiwanese branch of Citigroup leaked a December 2012 report to the hedge funds. The report included data from an Apple iPhone manufacturer that indicated iPhone production was expected to drop. At least three funds executed sales of Apple stock between the leak and the official publishing of the Citigroup report.

SAC is already in hot water with regulators. SAC’s CEO, Steven. A. Cohen, faces charges from the Securities and Exchange Commission for failing to adequately supervise traders in his employ who were engaging in unethical trading. The scope of the insider trading at SAC was described by Manhattan US Attorney Preet Bharara as “substantial, pervasive and on a scale without precedent in the hedge-fund industry.”

Both SAC and Citigroup have faced intense scrutiny from regulators over the past few months. In August Citigroup was forced to settle out with disgruntled investors for $590 million for hiding toxic assets.

It is unclear if the Stamford, Conn.-based SAC will face any further charges stemming from acting on the Apple leak and subsequent stock dump.

Citigroup dropped .55 percent to hit $48.44 a share.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


Signup for our daily newsletter and get our best articles emailed right to you!

				
				
  +Follow October 3, 2013 10:27AM
Share:

Comments

 

blog comments powered by Disqus

About us

Equities.com is the most advanced interactive online social ecosystem for the financial industry, serving as a resource center and next-generation communication platform that connects self-directed investors with public issuers, market experts, and professional service providers and vendors. Registered members can leverage our exclusive proprietary research tools such as the Small-Cap Stars, which outperformed 90% of all small-cap mutual funds, and robust do-it-yourself E.V.A. research reports. The Equities.com Issuer Dashboard is the ideal tool to communicate and manage investor awareness campaigns to the investment community, as well as to access valuable resources to help your company grow.

Market Data powered by QuoteMedia.
Copyright © QuoteMedia. Data delayed 15 minutes unless otherwise indicated. Terms of Use.