Jack Grubman, an analyst with Citigroup Inc's Salomon Smith Barney Inc unit, participated in at least 10 board meetings of seven different telecommunications companies he covered between 1997 and 2001, according to a letter from his firm to US lawmakers.
The letter was sent by a Citigroup lawyer to the House Financial Services Committee, which is investigating whether Grubman offered shares in initial public offerings to WorldCom Inc executives to help his firm win investment banking business.
Grubman attended two WorldCom board meetings between 1997 and 1999, according to an Aug. 7 letter from Jane Sherburne, deputy general counsel of Citigroup, the world's largest financial services company.
In addition, the letter says he attended or participated by telephone in board meetings at Broadwing Inc, Qwest Communications International, Global Crossing Ltd, Cincinnati Bell Inc, RCN Corp, and McLeodUSA Inc. At least seven of the meetings discussed acquisitions by the communications companies.
The letter also said: "We have anecdotal reports several other SSB analysts have, from time to time, attended board meetings of companies they analyzed."
Susan Thomson, Salmon Smith Barney spokeswoman, declined to comment today beyond Sherburne's letter. The names of the companies Grubman met with were reported earlier by the New York Times.
WorldCom, which filed the largest US bankruptcy last month after revealing it hid US$3.85 billion in expenses, disclosed another US$3.3 billion in accounting irregularities yesterday.
Lawmakers have accused Grubman of not scrutinizing WorldCom's finances because of his close relationship with former Chief Executive Officer Bernard Ebbers.
The SEC has accused the Clinton, Mississippi-based telecommunications company of civil fraud. WorldCom also is being investigated by the Justice Department and several congressional committees.
Salomon, along with 11 other Wall Street firms, is under investigation by the SEC and state regulators who are looking at whether the banks used analysts to tout stocks of companies from which they were trying to win investment banking business.
Congress and the SEC are also probing Citigroup's role in helping Enron Corp hide debt. The energy company disguised more than US$4.8 billion in loans with the help of Citigroup, according to a report by the Senate's Permanent Subcommittee on Investigations.
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