Zamansky filed an arbitration case against Grubman on Thursday. He is acting on behalf of a client who lost $455,000 after investing in high-profile telecommunications giant Global Crossing. The client claims that he purchased the shares on the basis of Grubman's optimistic research recommendations. Global Crossing has now filed for bankruptcy protection.
It is a fact that Salomon jointly led the Global Crossing initial public offering in 1998 and that Mr Grubman continued to be a supporter of the stock when other analysts began to have their doubts. Grubman rated the stock as one of his three 'top picks' in June 2001.
US Attorney Jacob Zamansky has already won a large settlement from Merrill Lynch over bullish research issued by former star Internet analyst Henry Blodget. He has now turned his sights on Salomon Smith Barney's telecom analyst, Jack Grubman.
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