Salomon Smith Barney’s former star telecom analyst Jack Grubman has reached a settlement with the New York Attorney General’s office that bars him from the securities industry for life and fines him $15 million, a lawyer involved in the case told CNNfn Friday.
The agreement is separate from the global settlement reached with several investment banking firms, including Salmon Smith Barney, but it also will be announced today at a news conference scheduled for 1 p.m. ET. The $15 million fine will be split between state and federal regulators.
An official of the NASD confirms the organization will bar Grubman from the securities industry.
The lawyer at the New York Attorney General’s office said it is possible other individuals still may face charges stemming from the investigation of Wall Street practices.
The settlement for the firms would fine 12 investment banks including Salomon, Credit Suisse First Boston and Goldman Sachs as much as $350 million each, depending on the evidence against them. The deal also will include behavioral changes on Wall Street, where charges of conflicts of interest and favoritism grew louder as the bear market deepened.
Citigroup will be the only firm required to issue a public apology as part of its settlement, but it will be made on behalf of the company, not an individual, such as company CEO Sandy Weill, a source close to the matter told CNNfn. Merrill Lynch’s CEO David Komansky issued a public apology on behalf of the company as part of Merrill’s settlement with the New York Attorney General.
Merrill Lynch also agreed to pay $100 million to settle charges that its research analysts publicly hyped stocks they privately ridiculed.
The settlement with the 12 investment banks is likely to result in the release of evidence that could enable a rash of investor lawsuits against the securities firms.
Still, a settlement could lift a cloud off the banks, whose stock prices in some cases have tumbled more than 20 percent year-to-date.