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Technology Stocks : WCOM -- Ignore unavailable to you. Want to Upgrade?

To: D.Austin who wrote (11451)	8/15/2002 10:41:20 PM
From: DEER HUNTER	Read Replies (1) \| Respond to of 11568

finally... biz.yahoo.com Thursday August 15, 8:06 pm Eastern Time Reuters Business Report Star Analyst Grubman Resigns Under Fire By Greg Cresci NEW YORK (Reuters) - Jack Grubman, the well-known Wall Street analyst under fire for his dogged support of disgraced telecoms giant WorldCom Inc. (Other OTC:WCOEQ.PK - News), resigned on Thursday, effective immediately. ADVERTISEMENT The news is the latest twist in an ongoing saga that has tarnished Salomon's reputation and highlighted perceptions of treachery on Wall Street. It comes on the same day that Salomon's parent, Citigroup Inc. (NYSE:C - News), created a position to oversee its stock research. "The current climate of criticism has made it impossible to perform my work to the standards I believe the clients of Salomon Smith Barney deserve," Grubman wrote in a resignation letter to the head of the firm's corporate and investment bank. Grubman, widely acknowledged as a guru of the once high-flying telecoms sector, is at the center of Congressional probes into conflicts of interest at the nation's top securities firms. Failed companies Grubman touted, including WorldCom, Global Crossing Ltd. (Other OTC:GBLXQ.PK - News) and Winstar Communications Inc., have cratered under mountains of debt and cost investors billions of dollars despite his "buy" exhortations. Grubman's longtime praise for WorldCom is seen as particularly egregious, given that company's recent collapse amid a $7 billion accounting scandal. "I did my work as an analyst within a widely understood framework consistent with industry practice that is now being extensively second-guessed," Grubman said in his letter. His salary, like that of most other Wall Street analysts, was linked to the amount of investment banking business his firm received. Grubman's compensation reportedly totaled more than $20 million a year in the late 1990s, when the U.S. telecoms euphoria was at its height. In April, an investor filed a $10 million arbitration claim against Grubman with the New York Stock Exchange. He has also been hauled before Congress to answer for perceived wrongdoing and become a lightning rod for criticism of analysts who double as rainmakers. The Wall Street Journal reported in May that Grubman helped make important managerial and business decisions at the now-bankrupt Global Crossing for two years after the fiber optic cable venture went public in 1998, while also consistently recommending that investors buy Global's stock. Salomon stood behind Grubman for months, defending his practices and seeking to deflect allegations that he stiffed investors who depended on his opinions. "Although he (Grubman), along with many other experts in the industry, did not anticipate the collapse of the telecommunications sector, we believe that ... he always wrote what he believed and conducted himself professionally and in accordance with legal and ethical standards," said Michael Carpenter, Salomon's chief of corporate and investment banking, in a note to employees on Thursday.