Former Salomon telecom analyst Jack Grubman reportedly gave his boss, Citigroup Chairman Sandy Weill, a progress report on his meetings with AT&T management in the months before a controversial upgrade of the shares in 1999.
Grubman sent a memo to Weill detailing his meetings with AT&T that made reference to the analyst’s efforts to get his children into an exclusive Manhattan nursery school efforts Grubman claims Weill helped facilitate, although not in a quid pro quo for an AT&T upgrade, The Wall Street Journal reported.
“Anything you could do Sandy would be greatly appreciated,” Grubman said in memo. “As I mentioned, I will keep you posted on the progress with AT&T which I think is going well.”
Weill conceded earlier in the week suggesting Grubman take a “fresh look” at AT&T shares, about which the analyst had long been negative. But Weill called another report claiming he was currying favor with AT&T’s chairman for help in a board room dustup untrue and Grubman said he was lying when he made that claim in an email.
In late 1999, Grubman upgraded AT&T to strong buy from hold. Shortly thereafter, Salomon was chosen as one of three underwriters on a stock sale by AT&T, receiving nearly $45 million in fees.