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Nick Wingfield contributed reporting from Seattle.
January 2, 2013By Fritzie Andrade, Emily B. Hager, Krishnan Vasudevan, Pedro Rafael Rosado and Samantha Stark
Austin Wintory, Grammy-nominated composer. | Apps to help keep New Year’s resolutions. | Ben Horowitz, entrepreneur and venture capitalist.
John Tlumacki/Boston GlobeWilliam F. Galvin, the top financial regulator in Massachusetts.Citigroup paid a $2 million fine and fired a prominent technology analyst after authorities accused the bank of improperly leaking to the media unpublished information about YouTube and confidential research on Facebook‘s initial public offering.
William F. Galvin, the Massachusetts secretary of the commonwealth, accused a junior Citigroup analyst of sharing nonpublic information about Facebook to TechCrunch, a blog focused on the technology world. The disclosure included Citigroup’s private revenue estimates for Facebook, as well as “Investment Risks” and “Investment Positives.”
Citigroup fired the junior analyst in September, according to Mr. Galvin’s order.
In a more surprising move, the bank on Friday also terminated his boss, Mark Mahaney, according to a person briefed on the matter.
“We are pleased to have this matter resolved,” a Citigroup spokeswoman said in a statement. “We take our internal policies and procedures very seriously and have taken the appropriate actions.”
Mr. Mahaney, a star analyst who covered the recent wave of technology I.P.O.s for Citigroup’s San Francisco research team, was not accused of any legal wrongdoing over Facebook’s public offering. The leak came solely from the junior analyst.
Mr. Mahaney was, however, blamed for not thwarting the illegal activity. Mr. Galvin did not disclose the name of the junior analyst.
Mr. Galvin’s order further took aim at Mr. Mahaney for discussing YouTube’s earnings with a reporter from a French magazine, Capital, without permission from Citigroup. The dialogue conflicted with Citigroup’s policy that research analysts receive internal approval before talking to reporters. The bank, like most Wall Street firms, also prevents analysts from expressing a viewpoint on companies unless the information is published in a report.
But ultimately, according to the person briefed on the matter, the decision to fire Mr. Mahaney had less to do with a breach of arcane compliance rules than his perceived cover-up.
The French reporter approached Mr. Mahaney in April seeking projections about YouTube’s revenue and earnings growth — information that Citigroup had not yet published in a report. Mr. Mahaney gave a terse e-mail reply that answered the essence of the reporter’s questions.
But when a bank spokeswoman followed up to remind Mr. Mahaney about seeking approval before an interview, he denied ever e-mailing the reporter. “I won’t respond,” he said, according to Mr. Galvin’s order.
The reporter later informed Citigroup that Mr. Mahaney did in fact respond. According to Mr. Galvin’s order, the analyst then asked bank employees to fudge the timing of the interview, an apparent attempt to avoid blame for not seeking approval.
When told that the accurate time was already submitted, he replied in an e-mail cited in the order: “This could get me into trouble. Shoot.”
It is unclear whether his e-mails amount to legal violations. But securities rules, Mr. Galvin noted, prohibit “unethical or dishonest conduct.”
Mr. Galvin also cited past problems in which Citigroup rebuked Mr. Mahaney for granting a February interview to Bloomberg Radio about Facebook before he officially covered the company. On another occasion this year, Mr. Galvin said, Citigroup cited Mr. Mahaney for not receiving approval before going on Canadian television.
Despite the focus on Mr. Mahaney, the main legal violations stemmed from the disclosure of Facebook information.
In May, the junior Citigroup analyst e-mailed two TechCrunch employees to say “I am ramping up coverage of FB and thought you guys might like to see how the street is thinking about it (and our estimates).” He attached a “Facebook one pager,” that featured an array of confidential information, including Mr. Mahaney’s private revenue estimates meant as an internal guide for the bank’s analysts.
Under securities rules and a nondisclosure agreement with Facebook, Citigroup analysts were banned from “disseminating written research” about the social networking giant until 40 days after the I.P.O. The restriction, which applied to all banks that helped take Facebook public in May, was created to prevent research analysts from improperly promoting companies in a bid to drum up business for bankers.
The rules were reinforced in a landmark 2003 settlement with several banks, including Citigroup. The case, led by a former New York attorney general, Eliot Spitzer, built a Chinese wall between Wall Street research analysts and investment bankers.
A TechCrunch employee sought to post the document on the Web, but the junior analyst balked.
“My boss would eat me alive,” he said.
Jenna Wortham for The New York Times Concertgoers use their smartphones to capture a Miguel concert in New York.Last night, a friend offered me an extra ticket to see one of my favorite new musical artists, Miguel. I quickly made my way to the event, where we chatted for a few minutes before the lights went down. Almost immediately, dozens of hands went up, holding softly glowing screens. I took a quick count and tallied no less than 50 cellphones and cameras, all straining to capture the show.
One woman’s look at technology and life.In the past, this would have irritated me to the point of no return. Having to watch the show through a myriad of tiny screens, bobbing in and out of my field of vision, would have most likely ruined the night for me. Although I’ll be the first to admit that I’m an obsessive documenter of my life and the world around me, I tend to limit myself to a snap or two at the beginning or end of a performance, as an effort to keep my focus on the show and not be distracted by trying to post details to Twitter, Facebook or Instagram.
At this show, however, I noticed something different. People pulled out their cameras at the introduction of the show and then again when Miguel segued into his most popular hits, the peaks in the performance when the energy was at its highest. They didn’t appear to be trying to record the entire show, just the feverish moments that invoked the shivery chills that keep us coming to live concerts and other gatherings despite the readily available alternatives on the Internet and Web.
Maybe these videos serve another purpose, beyond being just grainy, shaky clips that serve as little more than proof of attendance and a source of bragging rights among friends. Perhaps instead of trying to obsessively document the night, my fellow concertgoers were interested in capturing small snippets of the show to serve as a trigger in the future, reactivating the way they felt during those moments. The videos could augment that physical recollection of the night, rather than serve as a replacement for it.
Of course, plenty of people still try to capture every moment throughout the day; it’s compulsive and endemic of the way we interact and share information about our lives through the social Web. But maybe our reasons for recording are maturing, evolving past basic impulse. Maybe we’re starting to overdose on the amount of memories we can reasonably review and adapting our behavior to cope.
Maybe we’re starting to prioritize and selectively capture the flashes that seem most important, most evocative, and most likely to transport us back to the moment when they happened the first time around.