Hon Hai tries to clear name, accused in leak of Apple supplier data
BY Kathryn Chiu ,The China PostTAIPEI, Taiwan -- Hon Hai Precision (鴻海精密) on Friday cleared itself of any involvement in Citigroup's improper information disclosure of Apple's iPhone and iPad shipments, saying that the incident is a problem of Citigroup's internal control.
October 5, 2013, 12:01 am TWN
Massachusetts on Thursday fined Citigroup US$30 million for improperly releasing market-sensitive information on an Apple supplier to large clients including hedge fund SAC Capital Advisors.
The market started pointing fingers at Hon Hai Precision with knee-jerk reaction since it is the major assembler of Apple's iPhones and iPads.
Regarding the report, Hon Hai Precision, trading as Foxconn Technology (富士康科技) outside Taiwan, yesterday claimed that it is committed to safeguarding customers' information and professed that it has nothing to do with the information leakage.
Hon Hai Precision yesterday said in an official statement that it is committed to safeguarding customers' information and indicated that the report reflects only Citigroup's issues regarding compliance and controls process and nothing more.
According to media reports, in December 2012 Taiwan-based Citigroup Global Markets analyst Kevin Chang divulged to a handful of clients a lowered production forecast for Apple iPhones and iPads made by supplier 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% 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.
The fine came on the heels of two earlier settlements between the Citi unit and Massachusetts for similar securities laws violations.
Chang was terminated from Citigroup in September, the Massachusetts settlement document said.