In Focus
May 31, 2002
errill Lynch, move over. A second spotlight now is on Salomon Smith Barney.
According to the May 31st Wall Street Journal, Salomon's star cheerleader, analyst Jack Grubman, did more than just issue (allegedly false and misleading) analyst's reports regarding Global Crossing.
Turns out, analyst Grubman also was "instrumental in the making of key management and business decisions at Global Crossing, Ltd. for two years after the company went public in August, 1998". Indeed, in doing so, Grubman "far exceeded" analysts' traditional function of offering impartial advice to shareholders and investors according to the paper.
In response, a Salomon spokesperson claimed that it is "common for companies to speak to the analyst community to get an investor perspective". But, according to a securities law professor quoted in the Journal article, Grubman was in a "very conflicted position".
More details and denials are sure to follow as the A.G. digs more deeply into the bowels of the securities industry.
— James J. Eccleston
FinancialCounsel.com
|
