本文发表在 rolia.net 枫下论坛Wall St. and the Nursery School: A New York Story
November 14, 2002, New York Times
By Gretchen Morgenson and Patrick McGeehan
Jack B. Grubman, a former star telecommunications analyst, told a friend
in an e-mail message early last year that his boss, Sanford I. Weill,
the chairman of Citigroup, helped to secure spots in an exclusive
Manhattan nursery school for Mr. Grubman's twin daughters after he began
recommending that investors buy AT&T stock.
The description of the e-mail message was provided by a person involved
in investigations of Mr. Grubman's role on Wall Street, as well as two
others who were briefed on it, and the contents of the message were not
disputed by Mr. Grubman last night. Mr. Grubman's children attended the
school, and Citigroup pledged $1 million to the organization that runs
it, the 92nd Street Y.
In a statement to top executives late yesterday, Citigroup acknowledged
the attempt by Mr. Weill, who was an AT&T director, to help Mr.
Grubman's children get into the school but denied it was connected to
the analyst's upgrade of AT&T's shares. Mr. Grubman released a statement
in the early evening confirming that he wrote the message but said that
it was "nothing more than an extended invented story."
The circumstances surrounding Mr. Grubman's abrupt change in the fall of
1999 to an upbeat view on AT&T from a long-held negative one have come
under intense scrutiny from investigators in the office of Eliot
Spitzer, the New York attorney general, and NASD. They are trying to
assess whether research practices at the Salomon Smith Barney unit of
Citigroup were corrupted by the firm's investment banking relationships,
or desired relationships, with corporations. The e-mail message was
among records Citigroup turned over in the investigations.
Central to the investigations is Mr. Grubman's upgrade of AT&T in
November 1999. Soon afterward, Salomon reaped lucrative fees from an
offering of shares in AT&T's wireless subsidiary, which was spun off to
the public in April 2000.
Yesterday, Mr. Weill acknowledged publicly for the first time that he
had urged Mr. Grubman in 1999 to "take a fresh look" at AT&T. In a
statement, Mr. Weill said that his request of Mr. Grubman was not meant
to be viewed as pressure on the analyst to upgrade AT&T, a company which
Mr. Grubman rated a tepid "hold" at the time. Nevertheless, Mr. Grubman
soon did raise his rating on AT&T to "buy." A few months later, in April
2000, Salomon won a coveted role selling shares in AT&T's wireless
division to investors.
Alix Friedman, a spokeswoman for the 92nd Street Y, said that Citigroup
made a grant of $1 million over five years to the organization in the
early summer of 2000. The money is used to underwrite artistic and
cultural performances for audiences at the Y, she said. The Y Nursery
School, which emphasizes Jewish rituals and culture, is highly selective
and has 175 students.
As for the e-mail message linking Mr. Grubman's upgrade of AT&T to his
daughters' entry into the 92nd Street Y's nursery school, Mr. Weill
said, "I tried to help Mr. Grubman because he was an important employee
who had asked for my help." Mr. Weill said he called the school on
behalf of Mr. Grubman's children but did not say when. He added that
Citigroup's grant was consistent with the company's philanthropy, but he
did not say whether the money was given to persuade the school to admit
Mr. Grubman's children.
As the top executive of Citigroup, Mr. Weill presumably has much
influence over the company's charitable contributions.
Some securities lawyers said that it would be difficult to prove such a
contribution was done in exchange for Mr. Grubman's upgrade of AT&T.
"You would have to show that it's designed to improperly influence your
employee's judgment in terms of a stock recommendation," said Lewis D.
Lowenfels, an authority in securities law at Tolins & Lowenfels in New
York. "On its face, this does not seem to fit within that category. In
the context of the federal securities laws, it would seem to be an
immaterial event."
But Alan Bromberg, professor of securities law at Southern Methodist
University in Dallas, said that the contribution did not look good for
Citigroup. "It is a dubious way to use corporate funds," he said. "And
it indicates that lots of things were going on behind the scenes; not a
very good way to run a business that advises investors."
Mr. Grubman's credibility was damaged on Tuesday when he disavowed
another statement he had made about Mr. Weill in the same e-mail
message, which was reported in The Wall Street Journal. In the message,
he said Mr. Weill had asked him to upgrade AT&T to gain the support of
its top executive, C. Michael Armstrong, who was also a Citigroup
director. The message said Mr. Weill sought Mr. Armstrong's help in a
boardroom power struggle with John S. Reed, then co-head of Citigroup,
who subsequently resigned. That statement was a fabrication, Mr. Grubman
said yesterday, "to inflate my professional importance." And Mr. Weill
called that part of the e-mail message "sheer nonsense," adding, "I
would never attempt to manipulate a board member's vote."
"Mike Armstrong only considered the best interests of Citigroup
shareholders when making decisions as a director," said Eileen Connolly,
an AT&T spokeswoman.
Almost since the day three years ago that Mr. Grubman raised his rating
on AT&T, speculation has swirled that Mr. Weill played a part in the
analyst's about-face. Mr. Grubman had been known for his dim view on
AT&T and shortly after the wireless offering was made to investors, he
lowered his rating on the company once again to hold.
In his statement, Mr. Weill said: "I have said before, and will say
again: I never told any analyst what he or she had to write and I never
would. I did suggest to Jack Grubman that he take a fresh look at AT&T
in light of the dramatic transformation of the company and the industry.
I always believed that Mr. Grubman would conduct his own research and
reach independent conclusions that were entirely his own."
But current and former analysts said that a simple request from Mr.
Weill would probably be perceived as an attempt to influence the
analyst. " `Just take a fresh look' is 90's code for change your
opinion," said Tom Brown, chief executive of Bankstocks.com and a former
brokerage firm analyst. "At the investment banks in the 90's, everybody
realized we were making money because of transactions. Whether it was
your direct boss, the head of equity trading, head of investment banking
or the C.E.O. of the firm, the type of pressure that was put on you was
exactly what Sandy did."
Charles I. Clough, former strategist at Merrill Lynch and now principal
at Clough Capital Partners in Boston, said that in his years on Wall
Street he had never felt pressure from top executives to reassess an
investment view. "It would be hard pressure to shrug off if it's from
someone that high up," he said, referring to Mr. Weill. "It would take
some courage to shrug that off."
Mr. Grubman, then the most powerful telecommunications analyst on Wall
Street, certainly had the stature to maintain his hold rating on AT&T.
In his statement yesterday, he once again said that his research on AT&T
was always based on the company's merits. "I did ask Sandy Weill to help
with the preschool, and he did help, but none of that had anything to do
with my research," Mr. Grubman said.
But the existence of an e-mail message written by Mr. Grubman that
disputes his claims of only writing research that he believed in may
hurt his defense among the securities regulators who are considering
taking action against him.
"I think it's fair to say that Jack is influenced by what other people
can do for him and therefore that his opinions are not entirely
objective," Mr. Bromberg said. "Exactly what effect that had on what he
was telling investors or what he's telling the enforcement people right
now is hard to say. But it's clear that he had self-interest and that he
received a benefit."更多精彩文章及讨论，请光临枫下论坛 rolia.net
November 14, 2002, New York Times
By Gretchen Morgenson and Patrick McGeehan
Jack B. Grubman, a former star telecommunications analyst, told a friend
in an e-mail message early last year that his boss, Sanford I. Weill,
the chairman of Citigroup, helped to secure spots in an exclusive
Manhattan nursery school for Mr. Grubman's twin daughters after he began
recommending that investors buy AT&T stock.
The description of the e-mail message was provided by a person involved
in investigations of Mr. Grubman's role on Wall Street, as well as two
others who were briefed on it, and the contents of the message were not
disputed by Mr. Grubman last night. Mr. Grubman's children attended the
school, and Citigroup pledged $1 million to the organization that runs
it, the 92nd Street Y.
In a statement to top executives late yesterday, Citigroup acknowledged
the attempt by Mr. Weill, who was an AT&T director, to help Mr.
Grubman's children get into the school but denied it was connected to
the analyst's upgrade of AT&T's shares. Mr. Grubman released a statement
in the early evening confirming that he wrote the message but said that
it was "nothing more than an extended invented story."
The circumstances surrounding Mr. Grubman's abrupt change in the fall of
1999 to an upbeat view on AT&T from a long-held negative one have come
under intense scrutiny from investigators in the office of Eliot
Spitzer, the New York attorney general, and NASD. They are trying to
assess whether research practices at the Salomon Smith Barney unit of
Citigroup were corrupted by the firm's investment banking relationships,
or desired relationships, with corporations. The e-mail message was
among records Citigroup turned over in the investigations.
Central to the investigations is Mr. Grubman's upgrade of AT&T in
November 1999. Soon afterward, Salomon reaped lucrative fees from an
offering of shares in AT&T's wireless subsidiary, which was spun off to
the public in April 2000.
Yesterday, Mr. Weill acknowledged publicly for the first time that he
had urged Mr. Grubman in 1999 to "take a fresh look" at AT&T. In a
statement, Mr. Weill said that his request of Mr. Grubman was not meant
to be viewed as pressure on the analyst to upgrade AT&T, a company which
Mr. Grubman rated a tepid "hold" at the time. Nevertheless, Mr. Grubman
soon did raise his rating on AT&T to "buy." A few months later, in April
2000, Salomon won a coveted role selling shares in AT&T's wireless
division to investors.
Alix Friedman, a spokeswoman for the 92nd Street Y, said that Citigroup
made a grant of $1 million over five years to the organization in the
early summer of 2000. The money is used to underwrite artistic and
cultural performances for audiences at the Y, she said. The Y Nursery
School, which emphasizes Jewish rituals and culture, is highly selective
and has 175 students.
As for the e-mail message linking Mr. Grubman's upgrade of AT&T to his
daughters' entry into the 92nd Street Y's nursery school, Mr. Weill
said, "I tried to help Mr. Grubman because he was an important employee
who had asked for my help." Mr. Weill said he called the school on
behalf of Mr. Grubman's children but did not say when. He added that
Citigroup's grant was consistent with the company's philanthropy, but he
did not say whether the money was given to persuade the school to admit
Mr. Grubman's children.
As the top executive of Citigroup, Mr. Weill presumably has much
influence over the company's charitable contributions.
Some securities lawyers said that it would be difficult to prove such a
contribution was done in exchange for Mr. Grubman's upgrade of AT&T.
"You would have to show that it's designed to improperly influence your
employee's judgment in terms of a stock recommendation," said Lewis D.
Lowenfels, an authority in securities law at Tolins & Lowenfels in New
York. "On its face, this does not seem to fit within that category. In
the context of the federal securities laws, it would seem to be an
immaterial event."
But Alan Bromberg, professor of securities law at Southern Methodist
University in Dallas, said that the contribution did not look good for
Citigroup. "It is a dubious way to use corporate funds," he said. "And
it indicates that lots of things were going on behind the scenes; not a
very good way to run a business that advises investors."
Mr. Grubman's credibility was damaged on Tuesday when he disavowed
another statement he had made about Mr. Weill in the same e-mail
message, which was reported in The Wall Street Journal. In the message,
he said Mr. Weill had asked him to upgrade AT&T to gain the support of
its top executive, C. Michael Armstrong, who was also a Citigroup
director. The message said Mr. Weill sought Mr. Armstrong's help in a
boardroom power struggle with John S. Reed, then co-head of Citigroup,
who subsequently resigned. That statement was a fabrication, Mr. Grubman
said yesterday, "to inflate my professional importance." And Mr. Weill
called that part of the e-mail message "sheer nonsense," adding, "I
would never attempt to manipulate a board member's vote."
"Mike Armstrong only considered the best interests of Citigroup
shareholders when making decisions as a director," said Eileen Connolly,
an AT&T spokeswoman.
Almost since the day three years ago that Mr. Grubman raised his rating
on AT&T, speculation has swirled that Mr. Weill played a part in the
analyst's about-face. Mr. Grubman had been known for his dim view on
AT&T and shortly after the wireless offering was made to investors, he
lowered his rating on the company once again to hold.
In his statement, Mr. Weill said: "I have said before, and will say
again: I never told any analyst what he or she had to write and I never
would. I did suggest to Jack Grubman that he take a fresh look at AT&T
in light of the dramatic transformation of the company and the industry.
I always believed that Mr. Grubman would conduct his own research and
reach independent conclusions that were entirely his own."
But current and former analysts said that a simple request from Mr.
Weill would probably be perceived as an attempt to influence the
analyst. " `Just take a fresh look' is 90's code for change your
opinion," said Tom Brown, chief executive of Bankstocks.com and a former
brokerage firm analyst. "At the investment banks in the 90's, everybody
realized we were making money because of transactions. Whether it was
your direct boss, the head of equity trading, head of investment banking
or the C.E.O. of the firm, the type of pressure that was put on you was
exactly what Sandy did."
Charles I. Clough, former strategist at Merrill Lynch and now principal
at Clough Capital Partners in Boston, said that in his years on Wall
Street he had never felt pressure from top executives to reassess an
investment view. "It would be hard pressure to shrug off if it's from
someone that high up," he said, referring to Mr. Weill. "It would take
some courage to shrug that off."
Mr. Grubman, then the most powerful telecommunications analyst on Wall
Street, certainly had the stature to maintain his hold rating on AT&T.
In his statement yesterday, he once again said that his research on AT&T
was always based on the company's merits. "I did ask Sandy Weill to help
with the preschool, and he did help, but none of that had anything to do
with my research," Mr. Grubman said.
But the existence of an e-mail message written by Mr. Grubman that
disputes his claims of only writing research that he believed in may
hurt his defense among the securities regulators who are considering
taking action against him.
"I think it's fair to say that Jack is influenced by what other people
can do for him and therefore that his opinions are not entirely
objective," Mr. Bromberg said. "Exactly what effect that had on what he
was telling investors or what he's telling the enforcement people right
now is hard to say. But it's clear that he had self-interest and that he
received a benefit."更多精彩文章及讨论，请光临枫下论坛 rolia.net