Contact Us

PW Case Review Form
*    Denotes required field.

   * First Name 

   * Last Name 

   * Email 

Phone 

   * Please describe your case:

What injury have you suffered?

For verification purposes, please answer the below question:
+
=

No Yes, I agree to the Parker Waichman LLP disclaimers. Click here to review.

Yes, I would like to receive the Parker Waichman LLP monthly newsletter, InjuryAlert.

please do not fill out the field below.


Citigroup Chief, Probers To Talk

Unit's Stock Ratings Under Scrutiny

Oct 24, 2002 | Washington Post

Citigroup Inc. Chairman Sanford I. Weill will talk to New York state investigators looking into stock picks at the firm's investment-banking unit, Citigroup said today.

New York investigators, meanwhile, said Weill is not currently the target of a criminal probe, and Weill dismissed any suggestion that he is as "outrageous speculation."

Weill was responding to an article in today's Wall Street Journal stating that state Attorney General Eliot L. Spitzer may be considering legal action against the Citigroup chairman. In a memo to senior Citigroup management today, Weill said the article was based on "wild inferences."

In the memo, which was released by Citigroup, Weill attorney Marty Lipton said: "The notion that there could be any charge against Sandy Weill is inconceivable. There is no divergence between the interests of Sandy and Citigroup." A Journal spokeswoman said the paper stood behind its story. "We are confident it is both fair and accurate," she said.

A spokesman for Spitzer, who has been conducting a broad investigation into alleged conflicts of interest at Citigroup's Salomon Smith Barney unit, said "Mr. Weill offered to meet with the office, and we welcome his cooperation." The spokesman confirmed that Weill has been informed that his own legal interests may be diverging from Citigroup's but added that the warning was a "formality" and that the discussion with Weill would be an "interview" and not a deposition.

Spitzer's office has been looking into allegations that Weill pressured former Salomon telecommunications analyst Jack B. Grubman into upgrading AT&T shares in 1999 just before Salomon won a lucrative lead role in underwriting the initial public offering of AT&T Wireless. Grubman has said his upgrade was based on thorough analysis. AT&T has said it selected Salomon for the IPO because of its extensive retail brokerage business. Weill has repeatedly said he never told Grubman to change his rating on AT&T.

He reiterated that denial today. "I have never told any analyst what he or she had to write and I never would," Weill said. "My conduct has been entirely lawful."

Michael L. Mayo, an analyst at Prudential Securities who has been critical of Citigroup, said that while any eventual charge against Weill could be hard to prove, continued media coverage of the matter could damage the firm's reputation and weaken its hand in dealing with regulators. "Even if something illegal wasn't done and [Weill] simply said, 'Why don't you take another look at AT&T,' that would border on unethical and could impact Citigroup's reputation and incur increased regulatory attention," Mayo said.

News that Weill will talk with Spitzer's office comes as top lawyers at Wall Street firms plan to meet with regulators in Washington on Thursday to discuss a possible "global settlement" of multiple inquiries into alleged conflicts of interest in the industry. The meeting, which will take place at the Securities and Exchange Commission, is to include the general counsels of all of Wall Street's biggest firms. Regulators attending will include Spitzer, other state officials, and representatives from the SEC and Wall Street's two self-regulatory bodies, NASD and the New York Stock Exchange.

Among other things, participants are likely to discuss creating a research consortium that would be jointly funded by all Wall Street firms and that would produce reports that the firms would have to provide investors along with any reports produced internally. Another suggestion on the table will be the creation of an oversight committee to monitor and certify Wall Street research. Regulators have largely dismissed the idea of forcing Wall Street firms to spin off their research arms entirely. Many firms have said they rely on analysts to advise investment bankers.

Firms under the heaviest scrutiny, including Salomon and Credit Suisse First Boston Corp., have expressed willingness to do whatever it takes to end current probes. Other firms under less pressure, including Goldman Sachs Group Inc., have expressed a desire to move more slowly. But the prevailing mood on Wall Street is to put all the probes to bed as soon as possible. "I don't know why they are just meeting for one day," one executive at a major firm said of Thursday's summit in Washington. "Why don't they lock themselves in for the whole weekend and get this thing done?"


Related articles
Parker Waichman Accolades And Reviews Best Lawyers Find Us On Avvo