(Adds quotes from Galvin, background)
BOSTON, Oct 26 (Reuters) - Massachusetts' top securities regulator said on Friday that his office is looking into whether top Wall Street investment banks in addition to Citigroup have leaked research in violation of state law on how to share this kind of information.
``We are looking at all of them, Morgan Stanley, Goldman Sachs, JPMorgan,'' regulator William Galvin said in a telephone interview about the probe. ``It is a very active investigation,'' Galvin said, declining to give more information about what kind of charges may be made.
Earlier on Friday, Galvin's office said it has won a $2 million settlement with Citigroup after two of its analysts doled out information about top technology companies to a small number of journalists. Citi fired Mark Mahaney, the senior analyst in the case, and an unnamed junior analyst in the wake of the Massachusetts probe.
Galvin's office said Citi's junior analyst passed on some of the bank's confidential financial forecasts about Facebook while the senior analyst passed on confidential information about Google unit YouTube. Galvin said the Citi case was concluded first because his investigators were able to find emails to prove the information was discussed improperly.
``This is a recurring theme. The banks promise there is a firewall between research and marketing, that they will observe the quiet period, but that is clearly not the case,'' Galvin said.
He said he is pursuing the investigation nearly a decade after big banks reached a global settlement on research to make sure that investors are protected. ``This is about not having two sets of rules one for preferred clients and one for everyone else,'' Galvin said.
Galvin has a reputation for acting quickly on issues where federal regulators may be slower to move in. ``Mr. Galvin is very aggressive, and, in fairness, does a great job in upholding the law in Massachusetts,'' said Anthony Sabino, a business professor at St. John's University.
He also said there may be more to come on how the banks treated clients.
``Keep in mind this is but a preview of the ongoing shareholder litigation, regulatory investigations, and so on trying to find out what went wrong with the Facebook IPO.''
(Reporting By Svea Herbst-Bayliss; Editing by Gerald E. McCormick and Steve Orlofsky)