FORTUNE -- Ten months ago, while Apple's (AAPL) share price was stumbling and starting to falter, Citi's Glen Yeung gave it a good kick.
Citing reports of lower iPhone production at Hon Hai, Citi's newly appointed Apple analyst cut his price target and his rating -- from Buy to Neutral.
"Near-term supply chain order cuts," he wrote in a Dec. 17 note to clients, "while inconclusive in nature, bring into question the strength of iPhone 5 and refocus investors onto risks in the Apple story."
What Yeung didn't mention was that Citi had been tipped off nearly a week earlier about those production cuts and that one of his colleagues, a Citi analyst based in Taiwan named Kevin Cheng, had been slipping the information to selected hedge funds on the QT.
Cheng's name figures prominently in a consent order released Thursday by Massachusetts Secretary of State William Galvin. Citi has agreed to pay $30 million to dispose of allegations that Cheng violated both State and Federal security laws last December by telling clients who traded in Apple what was in Hon Hai's production report before it was published -- in other words, while it was still supposed to be a secret.
The allegations surfaced as part of the wide-ranging insider trading probe of billionaire Steve Cohen and his hedge fund, SAC Capital.
For anybody interested in where information about Apple's supply chain comes from and how it gets disseminated, the court order makes for a fascinating read.
Basically, Cheng got pressured into giving up what he knew by aggressive traders who had got wind of a rumor and wanted his take on it before the news reached the market.
"can u send me everything u have on the entire iphone 4/4s/5 supply chain" one client wrote in an e-mail.
To which a Citi employee attached a note saying:
"Not sure who's world this is in, but can you please send directly to [unnamed SAC employee]. He needs it asap -- works directly for [SAC Capital.]"
In retrospect, Cheng's forecast of a 30% cut in fiscal Q2 2013 iPhone production -- which seemed extreme at the time -- wasn't that far off.
For fiscal Q1 2013, Cheng predicted sales of 53 million iPhones. Apple sold 47.8 million.
For Q2, Cheng forecast 33 million iPhones. Apple sold 35 million.
LINK: Citi Consent Order. The good stuff is in Part VI: Statement of Facts.
But its supply chain sources suggest that an iWatch this year is "increasingly likely."
FORTUNE -- "While we had expected to hear optimism around Apple's forthcoming product refreshes in this round of checks, we were surprised at the skepticism at many points in the supply chain."
So begins the latest sour note to clients from Citi's Glen Yeung, who has been down on Apple (AAPL) since he took over last year for Richard MOREPhilip Elmer-DeWitt - Jun 7, 2013 10:27 AM ET
Using the 2010 HP campaign as a template to measure the damage Apple might suffer.
FORTUNE -- Citi's Glen Yeung on Monday tried to put a dollar figure on the potential cost to Apple (AAPL) of China's state-sponsored propaganda campaign, now entering its third week.
Apple, he points out, is not the first foreign company to be targeted by the People's Republic. YUM brands (part of KFC) saw sales fall 20% year over MOREPhilip Elmer-DeWitt - Apr 1, 2013 11:29 AM ET
Because 13 of the 50 largest U.S. hedge funds were dumping their Apple holdings
FORTUNE -- Citigroup's Tobias Levkovich buried the lead when he reported Wednesday that Google (GOOG) had replaced Apple (AAPL) as the hedge funds' favorite stock in Q4 2012.
If you zoom in on his spreadsheet above (apologies for the bad reproduction) you'll see that Google made it on to one more top 10 list of the 50 largest U.S. hedge funds MOREPhilip Elmer-DeWitt - Mar 10, 2013 8:45 AM ET
Barclays met with Apple execs. Citi asked suppliers. Merrill searched Google Trends
FORTUNE -- Apple (AAPL) gave up most of Tuesday's $9.66 (2.3%) gains in the first half hour of trading Wednesday after three analysts issued tepid reports:
Barclay's Ben Reitzes lowered his Apple price target to $530 from $575 after meeting with two senior VPs -- Phil Schiller and Peter Oppenheimer -- although he insists that his 8% reduction had nothing to MOREPhilip Elmer-DeWitt - Mar 6, 2013 11:41 AM ET
"Apple and Samsung are the only investable smartphone brands" -- Citi Research
FORTUNE -- Things look grim for everybody but Apple (AAPL) and Samsung in the profitable segment of the smartphone market, according to a note to clients issued Tuesday by a team from Citi Research. The pie chart above and the paragraph below say it all:
Smartphone Market Faces Dramatic Structural Changes - At the high end (US$500+), Apple and Samsung MOREPhilip Elmer-DeWitt - Dec 11, 2012 10:07 AM ET
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PC manufacturers -- and apparently, some users -- have gotten their hands on early builds of Windows 8, which will include support for ARM chips and features like enhanced graphics, 3-D support, facial recognition, instant-on capability and a Windows app store. Microsoft also looks to MOREJP Mangalindan, Writer - Apr 4, 2011 8:44 AM ET
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