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Citigroup Denies New Accusations Over Weill

Nov 13, 2002 | Citigroup has strenuously denied more accusations that Sandy Weill, its chairman and chief executive, ordered his star analyst to upgrade the bank's rating on AT&T.

The bank said a report in Wednesday's Wall Street Journal that Jack Grubman, telecommunications analyst at Citigroup's investment banking arm Salomon Smith Barney, was ordered to review A&T's rating was "nonsense".

The WSJ reported that Mr Grubman sent a series of emails to an analyst in January 2001, claiming Mr Weill had put pressure on him, not just because he wanted to win a financing deal from the telecommunications group, but also so Mr Weill could gain support for his leadership bid of the bank.

At the time of the upgrades in 1999, Mr Weill was locked in a leadership battle with Citigroup's former co-chairman John Reed.

By upgrading AT&T's stock, the Journal says, Mr Weill was trying to gain the support of AT&T chief executive Michael Armstrong, who also serves on the Citigroup board.

Citigroup's statement on Wednesday said: "These emails are pure fantasy.

"The suggestion that Jack Grubman upgraded AT&T as part of Sandy Weill's effort to win Mike Armstrong's support on the Citigroup Board is nonsense.

The regulators have already received unequivocal sworn testimony from Mr Grubman that they are "fabrications" with "zero basis" in reality.

"We can't comment on why Mr Grubman wrote them - you'll have to ask him."

Mr Weill was forced, at the end of last month, into public efforts to clear his name over conflicts of interest accusations over the AT&T upgrades.

He said at the time: "I have never told any analyst what he or she had to write - and I never would."

The statement was made after Eliot Spitzer, the New York attorney-general, who is probing possible conflicts of interest in the research department of Salomon, hinted he may take legal action against Mr Weill.

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