WSJ quoted unnamed sources and reported that Grubman recommended the hiring of former chief executive Robert Annunziata, was involved in the negotiation of merger deals and even advised the company's former chairman, Gary Winnick, on his personal share dealing.
The top-rated analyst reportedly earns $20m a year and is already accused of similar conflicts in connection with telecoms firms WorldCom and Quest. George Zicarelli filed suit against Grubman and Salomon last month claiming that he lost $450,000 due to Grubman's 'misleading' recommendation to purchase shares in Global Crossing.
Salomon is resolutely standing behind Grubman. They have no choice as their fortunes are inextricably linked with his. It appears that anything Grubman did he did with his employer's blessing.
Salomon are one of several securities firms currently being probed by the US Securities & Exchange Commission in connection with analyst conflict of interest claims.
Salomon Star Under Greater Pressure
The Wall Street Journal (WSJ) has reported that Salomon star telecoms analyst Jack Grubman was involved in important management and business decisions at now bankrupt Global Crossing while continuing to recommend its stock to investors.
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