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Citibank Fires Top Tech Analyst After $2M Fine

Citibank's Mark Mahaney tracked companies like Facebook and Google

Citigroup has fired prominent technology analyst Mark Mahaney after a Massachusetts securities regulator fined the company $2 million for disclosing confidential information to journalists.

Mahaney, a former Morgan Stanley junior analyst, had been with Citi since 2005 and is considered one of the nation’s top Internet analysts. He covered companies such as Facebook and Google.

A Citi spokeswoman did not draw a direct connection between the two matters, but acknowledged that Mahaney no longer worked for the company and the firm issued the following statement:

“We are pleased to have this matter resolved. We take our internal policies and procedures very seriously and have taken the appropriate actions.” 

Citi ran afoul of regulators due to a junior analyst’s communications with two reporters at TechCrunch and an email a senior analyst sent to a journalist for the French magazine Capital. The senior analyst was also criticized for failure to supervise the junior analyst.

Though the regulatory filing does not name Mahaney, it describes the senior research analyst as someone who has covered the technology field since 2005 — in other words, Mahaney. Business Insider has identified the other individuals in play.

After the initial dot-com bubble, banks had agreed to tighter restrictions on analyst disclosures, which these seemed to violate.

According to the documents, the junior analyst sent the TechCrunch reporters the following email May 2 (before Facebook’s IPO):

“I am ramping up coverage on FB and thought you guys might like to see how the street is thinking about it (and our estimates). Any feedback on the investment positives and risks would be super helpful. I want to make sure I'm thinking about this the right way. This, of course is confidential.”

He also attached a report from a Citi senior analyst.

When the reporter asked if he could use it citing an anonymous source, the junior analyst replied “My boss would eat me alive.”

Massachusetts also rebuked Citi for Mahaney’s communications with the Capital reporter. The reporter sought to ask Mahaney follow-up questions on a report about Google and YouTube, but Citi spokespeople denied the request. Mahaney subsequently responded to the reporter’s emails.