Citigroup tech analyst Mark Mahaney, whose opinions on companies like Facebook and Google are widely followed on Wall Street, was fired today after committing a couple of junior-varsity e-mail snafus that earned the bank a $2 million fine from a Massachusetts regulator.
According to the complaint (PDF) from Massachusetts Secretary of the Commonwealth William Galvin, Mahaney's first big mistake was e-mailing a French business reporter his not-yet-published thoughts on YouTube earlier this spring, in violation of both securities laws and Citi's internal rules about speaking to the press without consent. The French reporter e-mailed Mahaney three questions about his YouTube revenue projections, to which he replied with a cursory, "Yes, Yes, Yes."
When a Citigroup PR person, who was CC'ed on an earlier e-mail, told Mahaney he would need approval before writing back to Monsieur Business Reporter, Mahaney lied: "i wont responde [sic]." But, of course, he already had. Then the PR person discovered the ruse: "I thought I saw an email from you earlier saying you were NOT going to respond."
Mahaney, realizing his mistake, e-mailed: "This could get me into trouble. Shoot."
Incident No. 2 was not, strictly speaking, Mahaney's fault. One of his junior employees, a 2008 Stanford graduate (who has since been fired from the bank), was so excited to be helping Mahaney with research projects in the lead-up to Facebook's IPO that he couldn't help sending said research projects to two of his friends who worked at TechCrunch. That, of course, was also illegal, under securities law and the terms of a non-disclosure agreement between the bank and Facebook.
From the complaint:
Junior Analyst sent an email ("Initial Email") through the CGMI email system with extension @citi.com to TechCrunch Employee 1 and TechCrunch Employee 2 @TechCrunch.com stating:
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.
His TechCrunch friends, realizing they'd just gotten pre-publication reports from one of Wall Street's most powerful analyst teams about the year's hottest tech IPO, asked if they could publish the reports anonymously.
Junior Analyst, in a moment of self-awareness not unlike his boss's earlier one, replied: "My boss would eat me alive."
Wall Street! How many times do we have to remind you? When committing dubious acts of questionable legality, use your Gmail account!