Mark Mahaney, a star tech analyst at Citigroup, was just fired.
He got canned because one of Mahaney's junior associates leaked information about the bank's views on the Facebook IPO to TechCrunch writers Josh Constine and Kim-Mai Cutler, and that led to the state of Massachusetts fining his firm $2 million.
Mahaney also went outside required protocol interacting with a French journalist.
Here's how the story goes, according to a filing in the case.
On May 2, Eric Jacobs, a junior Citi analyst who went to Stanford University with Constine, emailed Constine and Cutler from his work email address to say:
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 prositives and risks would be super helpful. I want to make sure I'm thining about this the right way.
This, of course is confidential
The junior analyst also attached a document titled "Facebook One Pager," which Massachusetts says contained "confidential, nonpublic information" including Mahaney's Facebook investment risks and investment positives, estimate of the company's EBITDA, and valuation of Facebook.
Constine emailed Mahaney's junior analyst back: "There's no way I can publish this doc from an anonymous source, right?"
Jacobs replied: "My boss would eat me alive."
Constine wrote back: "Just to be clear this is what Citigroup wrote about FB?"
Jacobs answer: "That's just an outline that I put together—it wil eventually become our initiation report at 30-40 pages."
Later, the other TechCrunch writer, Kim-Mai Cutler, responded to Jacobs's first email to ask for a clarification on one of the metrics in the Citi report. Jacobs responded with more detail.
Massachusetts got its hands on all these emails because it was investigating the Facebook IPO and had a subpoena for Citi's email records.
In its legal filing laying out the facts, Massachussets does not name Mahaney, Jacobs, Constine, or Cutler.
It describes Mahaney as Citi's "Senior Research Analyst" covering technology. We know it's Mahaney because that has been his job for several years. Additionally, reports of Mahaney's termination due to this fine are already out.
The filing describes Constine as "TechCrunch employee 1"—someone who used to write for Inside Facebook, and went to Stanford for an undergraduate degree and Master's degree. We know that's Constine because the description fits exactly.
The filing describes Culter as "TechCrunch employee 2"—someone who previously worked at VentureBeat and Bloomberg. That's Cutler to a T.
Finally, the filing describes Jacobs as a "Junior Research Analyst" who went to Stanford at the same time as "TechCrunch employee 1" and is friends with him on social networks. We know that's Jacobs because at the time of these events, Mahaney had three junior associates listed on his reports, and only Eric Jacobs went to Stanford.
It turns out that Jacobs and Constine were actually very close during their time at Stanford and after. In fact, one of Constine's Facebook profile photos is a snapshot of Constine and Jacobs together. We've been told by a source that Constine and Jacobs may have even lived together, and definitely "crashed at each other's places" for a while after school. The filing says Citi terminated the Junior Research Analyst earlier this fall, and a source close to Jacobs tells us he is currently looking for a job.
Massachusetts also punished Citigroup for an incident of "prior misconduct" on Mahaney's behalf.
What happened: CCing Citi's communications team, a French reporter asked Mahaney for his opinion on YouTube. The comms team said Mahaney did not have time, but Mahaney answered the questions. The reporter told Citi's comms team that Mahaney had answered the questions. The comms team emailed Mahaney to ask what was going on. Later, the Comms team tried to give Mahaney "post-approval" for the interview, and said that he had not shared private analysis, which he had.
In the middle of all this, Mahaney emailed the comms team: "Shoot."
He sent another email.
"This could get me into trouble. Shoot."
We've reached out to TechCrunch for comment. Update: An earlier version of this story said that Mahaney had not shared undisclosed information about YouTube. The Massachussets filing says he did.
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