According to the Wall Street Journal, Mahaney and Eric Jacobs were dismissed after the investment bank became aware of the pair attempting to cover up a violation of the bank's protocol on responding to media requests in April.

Mahaney produced influential research for Citigroup on a number of web giants including Amazon, Google, Yahoo and Groupon.

Massachusetts' securities regulator fined Citigroup £1.24 million on Friday for failing to properly supervise Mahaney and Jacobs.

The news comes as a further blow to the troubled Facebook IPO, which now faces a number of investigations over unsavoury practices and technical glitches.

Federal and state regulators are investigating a number of the banks that underwrote Facebook's IPO after investors have reportedly lost billions of dollars as the social network's shares have continued to tumble.