Posted on 08/23/2002 4:47:13 AM PDT by Libloather
New York Attorney General's Office Broadens Inquiry Into Salomon
Fri Aug 23, 4:01 AM ET
The New York state attorney general's office, broadening its inquiry into research practices at Salomon Smith Barney, is examining how the Citigroup Inc. (NYSE: C - News) unit won a lucrative financing assignment from AT&T Corp. and what role Citigroup Chief Executive Sanford Weill may have played, people familiar with the matter told The Wall Street Journal.
The big securities firm was one of three top underwriters on a huge April 2000 transaction, in which AT&T offered a then-record $10.62 billion "tracking" stock to finance its wireless-phone unit. The deal also produced one of the biggest paydays ever on Wall Street: nearly $45 million in fees each for Salomon Smith Barney and the two other firms, Goldman Sachs Group Inc. (NYSE: GS - News) and Merrill Lynch & Co.
But the assignment was controversial from the start. Salomon Smith Barney was selected as a lead underwriter only after Salomon telecom analyst Jack Grubman upgraded his rating on AT&T to a "buy." For years, Mr. Grubman had been bearish on AT&T stock, and Salomon often had been excluded from top spots in underwriting AT&T transactions. And, as reported in The Wall Street Journal at the time, the change by Mr. Grubman came after Mr. Weill, an AT&T board member, nudged the analyst to give AT&T a fresh hearing, people familiar with the deal said. AT&T Chairman C. Michael Armstrong regularly had asked Mr. Weill to urge Mr. Grubman to revisit the merits of AT&T's cable strategy, a person familiar with the matter says. Mr. Armstrong also was a Citigroup board member at the time.
Now, New York Attorney General Eliot Spitzer is investigating the transaction and the activities of Messrs. Grubman and Weill, among others, as part of a broad investigation into whether Wall Street firms violated New York State laws by hyping stocks of companies that also were investment-banking clients, possibly misleading investors in the process.
Wall Street Journal Staff Reporter Charles Gasparino contributed to this report
Paging Mr. Rubin...
What's really fascinating is Grubman.....the guy was obviously in bed with the the telecom companies, but he also has to know a lot about what the investment banks..Citi, ML, and JPM did....so, I think he'll roll over real fast....Grubby cold be thekey to a whole lot of fascinating stuff.....which explains why Citi did an incredibly stupid thing in paying him $32 millon to quit..talk about waving a red flag in front of Congress...but they felt it was cheap at the price..
No kidding! I'm Shocked, SHOCKED.....(end of Claude Rains impersonation) {{{snicker}}}}
I think Groobey's $32M bargaining position was, " Hey, I made you guys a bundle, now I'm gonna get my a** sued for big bucks by the investors we all conned. I need a little litigation money. So you better pony up ....or else......."
I believe that Rubin is at Citigroup - and more directly connected to this mess since Salomom Barney Frank is part of Citigroup.
Rubin was at Goldman Sachs before he became part of the Clinton administration.
You got that right.
If any on the money in a retirement vehicle was obtained through fraud, those funds are not exempt from attachment.
Harvard is being investigated for its role in the Mafia's looting of Russia.
Fastow's 3,000 offshore entities used to hide Enron assets are very similar to what the Russian crime bosses did. In fact, they even own banks in the same tax havens Fastow used.
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