Smith Barney Stock Fraud

The National Association of Securities Dealers is preparing to take regulatory action against Salomon Smith Barney analyst, Jack Grubman.

This action is in response to growing evidence that Salomon Smith Barney obtained investment banking business by agreeing to give companies favorable analyst reports. This marks the first major crackdown by federal securities regulators on the sordid relationship between analysts and investment bankers.

Mr. Grubman helped change the face of wall street analysts. Instead of simply assessing stocks, Mr. Grubman and his peers increasingly promoted them, and focused on helping bring in investment-banking deals for their firms. Mr.Grubman recently told Congressional investigators that his annual pay averaged about $20 million during the past several years.

The NASD, which last year became one of the first regulatory agencies to look at analysts, is investigating Mr. Grubman's issuing of positive research reports on Winstar during the winter and spring of last year, even as strong evidence began to emerge from other analysts and investors that the communications company was under financial duress, people with knowledge of the inquiry say.

Below is a list of stocks that Jack Grubman covered at Salomon Smith Barney:

• Winstar
• XO Communications
• Pacific Gateway
• GTE
• Intermedia
• Flag Telecom
• Williams
• AllegianceTelecom
• Broadwind
• Qwest
• Nextlink
• ATT
• Carrier 1
• Level 3 Communications
• McCleod USA
• PSI Net
• Rogers Wireless
• Metromedia

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