Citigroup Analyst Fined for Favouring Four Select Clients ; BUSINESS

By Daley, James | The Independent (London, England), March 21, 2007 | Go to article overview
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Citigroup Analyst Fined for Favouring Four Select Clients ; BUSINESS


Daley, James, The Independent (London, England)


A former Citigroup equity analyst was fined more than [pound]50,000 yesterday for disclosing details of an investment note to four of his clients, more than a week before the research was formally released into the market.

Roberto Casoni, the former head of Italian small-cap equities research at the bank, was fined [pound]52,500 by the Financial Services Authority (FSA), only reduced from a proposed penalty of [pound]75,000 because of his co-operation with the investigation.

The events took place in January last year when Mr Casoni was in the process of initiating coverage on Banca Italease, an Italian leasing and factoring bank. Having taken a different view on the bank's valuation from his analyst peers, Mr Casoni believed the stock provided investors with more than 50 per cent upside.

At the time, Banca Italease was trading at around [euro]25 ([pound]17). However, Mr Casoni had decided to initiate coverage with a "buy" recommendation and a share price target of [euro]37.

On 12 January 2006, he emailed a fund manager who held a large position in the stock, asking him to consider his model for valuation of the bank. An email discussion followed, before the pair finally met on 20 January. Although Mr Casoni's research had been approved by Citigroup's internal stock steering committee that morning, it was not to be published to the wider market for three more days.

Mr Casoni also contacted two more fund managers on 13 January to discuss details of his research, and emailed a spreadsheet containing his calculations to a fourth client three days later.

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