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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: Jim Willie CB who wrote (5550)	8/30/2002 3:07:58 PM
From: Cactus Jack	Read Replies (3) \| Respond to of 89467

JW, Enjoy the vacation. jpg

To: Jim Willie CB who wrote (5550)	8/30/2002 3:16:42 PM
From: stockman_scott	Respond to of 89467

Have a great vacation... I'm looking forward to the next 2 long weekends up in Michigan...it's hard to believe that my sister will be married in just over a week. regards, -Scott

To: Jim Willie CB who wrote (5550)	8/30/2002 4:42:14 PM
From: Sully-	Read Replies (4) \| Respond to of 89467

Stillirs rule dude! They're gonna maul the Patsies........ And if they don't, I got lots of splainin' to do to my wife :-\| LOL! Have a great vacation Jim!

To: Jim Willie CB who wrote (5550)	8/30/2002 4:45:50 PM
From: Sully-	Read Replies (1) \| Respond to of 89467

Ebbers IPO take was $11 million Citigroup denies any wrongdoing By William L. Watts, CBS.MarketWatch.com Last Update: 4:25 PM ET Aug. 30, 2002 WASHINGTON (CBS.MW) -- Former Worldcom CEO Bernie Ebbers made $11 million off of initial public offerings received from investment bank Salomon Smith Barney, according to documents obtained by subpoena Friday by a congressional panel. In a statement submitted to with the documents, Citigroup reiterated earlier statements that it did nothing wrong and that it supports a review of how IPOs are allocated to key customers. Ebbers was one of several WorldCom officials to receive shares in IPOs from the 1990s during a time when Salomon Smith Barney was handling investment banking business for the then-budding telecom. Ebbers collected shares at the offering price from companies such as Signalsoft, Tycom, KPN Quest, Juniper Networks, Juno Online, Metromedia Fiber, Teligent and Qwest. He then collected a total of $11 million in subsequent sales after the stocks began trading. Such a practice was, and continues to be, common throughout Wall Street for wealthy customers and institutions that rank as preferred customers in the quest for IPO shares.. The House Financial Services Committee is investigating whether Salomon Smith Barney distributed IPO shares to executives of its banking clients in exchange for lucrative underwriting business. In the papers released late Friday, Citigroup (C: news, chart, profile) said there was no quid pro quo expected as a result of Ebbers and other WorldCom executives receiving the shares. The bank also pointed out that Ebbers and other WorldCom officials received far less stock once Salomon was purchased by Citigroup as part of its 1997 merger with Travelers. Ebbers made about $10 million before the merger and about $1 million after. "Contrary to press interpretation of the materials we have submitted to the committee, Salomon Smith Barney provides allocations to a broad base of its retail clients," the bank said in a letter to Congress. "In the IPOs allocated to WorldCom officers and directors, there were large numbers of retail participants -- from several hundred in small deals to tens of thousands in larger deals." Still, the monetary gains revealed for the first time on Friday did not sit well with Rep. Michael Oxley, R-Ohio, chairman of the House Financial Services Committee. He complained individual investors who bought the IPOs in the open market after they skyrocketed helped fill the pockets of Ebbers and others. "Insiders were able to game the system at the expense of the average investor," Oxley said in a statement. "It raises policy questions about the fairness of the process that brings new listings to the markets." The committee earlier this week released Salomon documents obtained under an earlier subpoena that showed former WorldCom executives, including Ebbers and Scott Sullivan, were allowed to buy hundreds of thousands of hot IPO shares at their offering price. See full story. The committee on Friday said Oxley had signed the second subpoena to gain "more specific data and pricing information about technology stock shares" distributed to executives of now-bankrupt telecom carriers WorldCom (WCOEQ: news, chart, profile) and Global Crossing (GBLXQ: news, chart, profile). "The committee is interested in whether the shares were made available as an inducement for investment-banking business and whether 'spinning' was involved, permitting the executives to go back in time and purchase at the offering price after the price had already soared," the panel's statement said. Citigroup, in a letter that accompanied its response to the earlier subpoena, said its distribution practices were in line with industry practices and that the executives were major private clients of Salomon. The bank has said it was nevertheless considering measures aimed at reforming the IPO distribution process. Sullivan, the former WorldCom CFO charged earlier this month with fraud in connection with the now-bankrupt telecom giant's billions of dollars in earnings misstatements, and his wife, Carla, were allocated more than 30,000 shares in several IPOs. Sullivan made about $8 million, according to the Friday documents. WorldCom directors Bert C. Roberts and Kiles Stellett also received IPO shares from Salomon, the documents showed. Citigroup shares gave back earlier gains to fall 7 cents to close at $32.75 on Friday. Last week, Securities and Exchange Commission Chairman Harvey Pitt called for the IPO allocation process to be examined by regulators and industry representatives. No timetable has yet been set. See full story. Meanwhile, the NASD recently levied $400,000 in fines against executives at CS First Boston for charging inflated commissions to customers in exchange for IPO shares. See full story. William L. Watts is a reporter for CBS.MarketWatch.com. marketwatch.com