Citigroup (NYSE: C), the No. 3 U.S. bank, was fined $2 million by Massachusetts over its participation in Facebook’s (Nasdaq: FB) $17 billion initial public offering in May.

The New York-based bank was fined for its lack of supervision of a junior employee who e-mailed outsiders confidential information about the Menlo Park, Calif.-based company’s financial prospects ahead of the May 17 IPO.

Facebook ultimately reported a second-quarter loss of $157 million, or 8 cents a share.

A panel of 11 federal judges is expected to designate soon where dozens of shareholder lawsuits charging misconduct in the Facebook IPO will be heard early in 2013. Those suits mainly charge the company and its underwriters for not disclosing slowing sales, potential future losses and other material data.

William Galvin, Massachusetts Commonwealth Secretary, charged Citigroup Global Markets, one of the top three underwriters of the Facebook deal, with forwarding a forecast to journalists at Techcrunch, an online website controlled by AOL Inc. (NYSE: AOL).

Citigroup said the analyst was fired last month. Meanwhile, Internet analyst Mark Mahaney was fired Friday for failing to properly supervise the junior analyst.

“We take our internal policies and procedures very seriously,” a representative of Citigroup said.

Besides Massachusetts, the Facebook IPO is being reviewed by the U.S. Securities and Exchange Commission, various private industry groups including Finra, which scrutinizes Wall Street trading, and other state regulators.

Citigroup was among a group of underwriters that split about $176 million in fees from the Facebook deal, as well as providing the No. 1 social media site with syndicate loans before the IPO.

Shares of Facebook traded Friday at $22.18, down 38 cents, or about 42 percent below the $38 IPO price. The company reported a third-quarter net loss of $59 million, or 2 cents a share.

Shares of Citigroup fell 69 cents to $36.72.