Insider trading sounds more like something that would occur on the elementary school playground than on a global market forum, with peanut butter and jelly being the currency.

Most people today have another popular misconception, seeing shady backroom deals complete with heavy sweating individuals and large Cuban cigars. The recent decision by CITI group to settle with the Securities and Exchange Commission (SEC) however brings an interesting light to just how easy it is to be complicit with insider trading and that this kind of activity can happen very easily in the world of international business.

The case involving the Citigroup was not so much one of inside deals as it was the case of an analyst releasing information a little earlier than, perhaps, he should have which in turn gave traders what is perceived by the SEC to be an unfair advantage.

The largest benefactor of this was SAC Capital Advisors, who themselves are under massive investigation by the SEC for their business practices. The information passed along was seemingly innocent but the information that was pre-released caused Apple Inc., to lose roughly 5% of its share value when the information came to light, giving the “insiders” ample opportunity to make profits before the shares took a beating.

When Kevin Chang, a Taiwan based employee of Citigroup, revisited his estimates of the number of iPhones being ordered by Apple from its supplier the Hon Hai Precision Industry Company, he had no idea that those estimates would end up costing Citigroup a $30 million penalty.

In a consent order, signed by the company, it is revealed that Chang was pursued relentlessly by a hedge fund to reveal what his report contained. The hedge fund — SAC Capital — is no stranger to aggressive trading tactics. It was criminally indicted in July on charges that it permitted a “systematic” insider trading scheme to unfold from 1999 to 2010. Chang forwarded his completed report to SAC, among others, on December 13th which was one day before Citigroup released its report on Hon Hai. After the public release of the report Apple shares dropped about 5% on December 14th.  Chang also leaked the information to employees at T. Rowe Price and the hedge fund Citadel, which then traded in Apple shares. A third hedge fund, GLG Partners, also got the information.

William Francis Galvin, the Massachusetts secretary of the commonwealth, ordered Citigroup to pay a $30 million fine for allowing the analyst to share the unpublished research with SAC in violation of securities rules. In a statement released shortly after the settlement, Galvin stated that the hedge fund’s tactics did “not excuse” the bank’s conduct. Citigroup’s release of private information to the hedge funds, he said, underscored a fundamental unfairness in the markets. “The average citizen can’t get access to the same information,” he said.

Citigroup was also censured for the activities of Chang, who has since left the bank, and was ordered to undertake a three year long evaluation and assessment of their policies and procedures. Unfortunately this is not the first time Citi has been caught opening up the cookie jar. Roughly a year before, Citigroup settled another “leak” by two employees with the state of Massachusetts for non-public information being released on the company Facebook.

“It seems that the concept that investors are to be presented with a level playing field when it comes to the product of research analysts is a lesson that must be learned over and over again. But it’s important that it should be taught as often as necessary.” Added Galvin.