SAC Capital, Citadel, Apple information leak: An interesting piece of news came today from a few sources including TheStreet, according to which the research arm of Citigroup Inc. (NYSE:C) has to pay a $30 million fine from the Massachusetts securities regulator. The fine has reportedly been levied on Citi because it gave confidential information about Hon Hai, one of the main suppliers of Apple Inc. (NASDAQ:AAPL)’s iPhone, to some units of Steven Cohen’s SAC Capital Advisors, Ken Griffin’s Citadel Investment Group, GLG Partners and T.Rowe Price.
The information, which represented an updated forecast of Hon Hai’s production numbers, had been provided by Kevin Chang, a former research analyst at Citigroup’s Global Markets (CGMI) office in Taiwan. Chang released the information privately before publishing it the next day, which was December 14, 2012.
Citigroup Global Markets lowered Apple’s rating to “neutral” from “buy” two days after the report became available to the public. According to the order, three clients of CGMI sold shares of Apple before the report was published and after receiving the information from Chang.
Citigroup has agreed to settle the matter. “We take our regulatory compliance requirements very seriously and train all of our employees about these obligations,” The Street quoted Citigroup’s spokeswoman Sophia Stewart as saying in an e-mailed statement.