Facebook IPO Fallout: Citi Gets Slapped
The state of Massachusetts slapped Citigroup (NYSE:C) on the wrist Friday morning, fining the bank $2 million in connection to its improper disclosures surrounding the highly anticipated initial public offering of Facebook (NASDAQ:FB) back in May.
Massachusetts Secretary of the Commonwealth William Galvin explained that research analysts at one of Citigroup’s units violated state securities laws when a junior analyst sent confidential information about Facebook’s IPO in an email.
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Facebook entered its IPO with an enormous valuation, making it the largest and arguably most hyped technology IPO ever, only to watch its stocks plummet to nearly half their initial $38 value.
Galvin levied the fine and reprimanded top analysts at Citigroup Global Markets Group for not properly supervising the junior employee who disclosed the information.
“We take our internal policies and procedures very seriously and have taken the appropriate action,” Citigroup said in a statement after expressing its relief with having put the matter to rest. Citigroup is probably more than a little relieved, though, to escape the issue with only a $2 million setback – if you can even call $2 million a setback for the one of the U.S.’s largest banks.
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