Analyst charged with making false reports


Aug 20, 2002
Just when you thought you could trust these morons......I am sure no one like this exist in the airline sector.
Analyst admits inventing story
By Matthew Mogul, Associated Press business writer
November 14, 2002
NEW YORK - Jack Grubman, a star Wall Street analyst during the heyday for technology stocks, said Wednesday that he made up a story about how he used his ratings of AT&T stock to help his boss win a power struggle at Citigroup Inc.
Grubman said the story, sent by him in e-mail memos to another analyst, was just baseless boasting on his part. I invented a story in an effort to inflate my professional importance and make an impression on a colleague and friend, he said in a statement.
Grubman, who worked at Citigroup''s Salomon Smith Barney brokerage, is among analysts under investigation and is named in shareholder lawsuits over alleged manipulation of stock ratings. He resigned in August but insists he never issued a biased rating.
He was responding to a Wall Street Journal story that disclosed the e-mail, in which Grubman said Citigroup chief executive Sanford Weill pushed him to review his rating of AT&T stock to curry favor from AT&T CEO C. Michael Armstrong, a Citigroup board member, in a bid to oust a boardroom rival.
Weill also denied the account in a memo sent to employees and made public by the company. I have said before, and will say again: I never told any analyst what he or she had to write and I never would, he said. Nor would I ever attempt to manipulate a board member''s vote. Any suggestion that I did is just wrong.
In the late 1990s, Grubman became one of Wall Street''s most powerful analysts. His advice was sought and closely followed by both top executives making billion-dollar deals and small investors who staked their savings.
When technology stocks collapsed and many high-flying companies such as Global Crossing and WorldCom fell in bankruptcy or scandal, he and other leading analysts were accused of touting weak stocks to lure business to their companies.
In a filing with the Securities and Exchange Commission on Wednesday, Citigroup said Grubman and its Salomon Smith Barney unit have been named in some 62 class-action complaints.
New York State Attorney General Eliot Spitzer, who has been probing conflicts of interest at Wall Street firms involved in researching and trading stocks, uncovered the e-mail from Grubman, according to the Journal.
In his statement Wednesday, Grubman said, I have said a number of inappropriate, even silly, things in a few private e-mails that have been made public over the last few months. The contents of these particular e-mails, while personally embarrassing, are completely baseless.
My research on AT&T was always done on the merits, he said. It was not designed to help Salomon Smith Barney get investment banking business, nor was it designed to influence Mike Armstrong''s vote on Citigroup board matters.
Grubman has a history of exaggerating his importance. Two years ago, he acknowledged to Business Week magazine that he once pretended to have graduated from the Massachusetts Institute of Technology instead of his real alma mater, Boston University
You know what they say, if these guys and gals were so smart, they would be sitting on the beach in Tahiti sipping adult beverages!