This All-Star Internet Analyst Comes With Baggage.

[ by Howard Haykin ]

Citigroup fired Mark Mahaney in October, Royal Bank of Canada hired  him in January.  What can one say?  Life would not be complete without an endless, yet essential, stream of "risk-reward analyses" - particularly on Wall Street. 

The risk is that Mahaney committed disclosure violations. 

The reward is that Mahaney has been named #1 Internet Analyst by Institutional Investor ("II") for 5 consecutive years.

The Dismissal.   Mahaney joined Citigroup in 2005 after having worked at the State Department, and in positions with Morgan Stanley and the Galleon Group.  (Mr. Mahaney was not implicated in the Rajaratnam insider trading case.)    Citigroup dismissed Mr. Mahaney in October after regulators discovered that he had responded to a reporter's e-mail inquiry about the financial results of YouTube, a division of Google, without getting permission from the bank.  According to a regulatory filing, Mr. Mahaney initially denied ever e-mailing the reporter, when confronted by a Citigroup official.

The issue involving Mr. Mahaney came to light while SEC and Massachusetts regulators were conducting a broader inquiry into Facebook's contentious IPO on the Nasdaq Exchange.  Reports emerged that analysts had selectively shared research about the social network to a limited number of clients and journalists.  Facebook paid Massachusetts regulators $2 million to resolve its role in the Facebook investigation.

The Hiring.  In a news release issued Tuesday, RBC hired Mr. Mahaney, 47, as a managing director covering Internet stocks.  Marc Harris, the global co-head of research at RBC had this to say:  "We are excited to add Mark's talents to our strong global research team.  His long history of unparalleled buy-side relationships and insightful analysis of the Internet sector is second-to-none."

For further details,  go to:  [ Dealbook, 1/7/13 ].