Massachusetts on Thursday fined Citigroup US$30 million for improperly releasing market-
sensitive information on an Apple Inc supplier to large clients including hedge fund SAC Capital Advisors.
In December last year, Taiwan-based Citigroup Global Markets analyst Kevin Chang (張凱偉) divulged to a handful of clients a lowered production forecast for Apple iPhones and iPads made by supplier Hon Hai Precision Industry Co Ltd (鴻海精密) a day before the research was published, the state said.
The publication of the revised forecast suggesting lower demand for Apple products helped to propel a 5.2 percent drop in Apple’s share price over a two-day period. Massachusetts alleged that SAC Capital; Citadel, another hedge fund; and T. Rowe Price sold Apple stock after receiving the information and before it was released to the public.
A fourth firm, hedge fund GLG Partners, also received the early tip-off.
Chang disclosed the information to three units of SAC, the investment house of billionaire Steven Cohen, which is already facing a US Department of Justice criminal indictment over numerous alleged insider trading violations.
The fine came on the heels of two earlier settlements between the Citi unit and Massachusetts for similar securities laws violations.
“It seems that the concept that investors are to be presented with a level playing field when it comes to the product of research analysts is a lesson that must be learned over and over again,” Massachusetts State Secretary William Galvin said in a statement. “But it’s important that it should be taught as often as necessary.”
Citigroup agreed to pay the fine to close the case.
“We take our regulatory compliance requirements very seriously and train all of our employees about these obligations,” Citigroup said in a statement. “We are also constantly working to improve, manage and monitor the compliance and controls process.”
Chang was fired from Citigroup last month, the Massachusetts settlement document said.
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has appointed Rose Castanares, executive vice president of TSMC Arizona, as president of the subsidiary, which is responsible for carrying out massive investments by the Taiwanese tech giant in the US state, the company said in a statement yesterday. Castanares will succeed Brian Harrison as president of the Arizona subsidiary on Oct. 1 after the incumbent president steps down from the position with a transfer to the Arizona CEO office to serve as an advisor to TSMC Arizona’s chairman, the statement said. According to TSMC, Harrison is scheduled to retire on Dec. 31. Castanares joined TSMC in
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the