Business roundup: Citigroup fined over iPhone data leak; jobless claims remain low

Insider Trading
Citigroup fined on iPhone data leak

Citigroup will pay a $30 million fine after one of its analysts improperly sent confidential research on an Apple supplier to big clients including Steven A. Cohen’s hedge fund SAC Capital Advisors, a securities regulator said Thursday.

Citigroup analyst Kevin Chang e-mailed unpublished research about Hon Hai Precision Industry, a major supplier of Apple iPhones, to SAC, T. Rowe Price, Citadel and GLG Partners, said William Galvin, Massachusetts’ secretary of the commonwealth.

Chang’s research included lower order forecasts for Apple’s iPhones in the first quarter of 2013, which could have had a detrimental effect on Apple.

SAC, hedge fund Citadel and mutual fund firm T. Rowe Price all sold Apple stock after receiving the information from Chang, said a complaint filed by Galvin’s office.

At $30 million, the Massachusetts fine is one of the biggest that state securities regulators have ever collected and 15 times the $2 million they fined Citigroup for improperly disclosing research on Facebook’s initial public offering. The penalty comes less than one year after the Facebook case.

— Reuters

The Economy
Jobless claims show labor market healing

The number of Americans filing new claims for jobless benefits remained at pre-recession levels last week, but growth in the massive U.S. service sector cooled in September as firms took on fewer new workers.

The data could provide some of the strongest guidance this week on the health of the U.S. economy as a partial government shutdown delays the release of other data, including the monthly employment report that was scheduled to be released Friday.

Initial claims for state unemployment benefits edged up by 1,000 to a seasonally adjusted 308,000, the Labor Department said Thursday.

That was still fewer than seen before the 2007-09 recession, a signal that the long cycle of elevated layoffs may have ended. New jobless claims have been falling for much of the year.

However, employers have been reticent about adding new workers to their payrolls. The Institute for Supply Management said its services index fell to 54.4 last month after nearing an eight-year high in August. The pace of hiring cooled, with the employment sub-index slipping to 52.7 last month, a four-month low.

— Reuters

Also in Business

Microsoft won a ruling from a federal appeals court, which Thursday instructed the U.S. International Trade Commission to reconsider a judgment that gave Google a victory over Microsoft in a patent dispute. Acting on an appeal by Microsoft, the U.S. Court of Appeals for the Federal Circuit found that the ITC erred in its reasoning when it found that the Google unit Motorola Mobility did not infringe a Microsoft graphical interface patent.

Facebook, operator of the world’s most popular social network, will roll out advertising on its Instagram photo service, the first effort to make money from the company’s largest acquisition on record. Promotions will start to appear on the mobile application, which lets users share images from smartphones, in the next couple of months in the United States, Facebook said Thursday in a blog post. Instagram will deliver a “small number” of pictures and videos from a handful of companies that users aren’t necessarily following.●

Retailers won a significant ruling Thursday when a federal judge blocked enforcement of a New York state law that subjects retailers to criminal penalties if they impose surcharges on customers who choose to pay by credit card rather than cash. U.S. District Judge Jed Rakoff in Manhattan ruled in favor of several retailers who challenged the law on various grounds, including that it violated their free speech rights by prohibiting them from alerting customers to the extra costs of paying with credit cards.

Britain’s leading prosecutor, the Serious Fraud Office, is poised to charge more individuals in connection with a global investigation into the Libor interest rate rigging scandal. To date, U.S. and British authorities have charged seven men and fined four financial firms about $2.7 billion in the investigation into the manipulation of the London interbank offered rate (Libor), used as a benchmark for more than $300 trillion of home loans and other products.

— From news services

Coming Today

8:30 a.m.: No U.S. jobs report because of the government shutdown.

Comments
Show Comments
Most Read Business

business

economy

Success! Check your inbox for details.

See all newsletters