Ex-Salomon Broker Files Claim on Grubman, Citigroup
A former Salomon Smith Barney broker who says she repeatedly questioned Jack Grubman on many of his stock calls filed an arbitration claim against the former telecommunications analyst and his Wall Street firm, the Wall Street Journal reported on January 13.
Broker Cheryl Schwarzwaelder of Pittsburgh and more than 25 of her clients filed a claim with the New York Stock Exchange against Citigroup Inc.'s Salomon Smith Barney unit and Grubman, seeking $17.2 million of damages, including $10 million of punitive damages, the newspaper said.
Neither Citigroup nor Grubman's lawyer could be reached immediately for comment early on Monday morning.
The newspaper said that, according to the arbitration claim filed by New York lawyers, Schwarzwaelder repeatedly questioned Grubman's favorable ratings on stocks such as WorldCom Inc. and Global Crossing Ltd. The companies have filed for bankruptcy protection and are under federal investigation for various alleged accounting misdeeds.
Grubman, the former telecommunications analyst for Salomon Smith Barney who resigned in August amid harsh criticism over poorly performing stock picks, in December settled with regulators for $15 million and a lifetime ban from the securities industry. Critics had accused him of tailoring his research to help Salomon win underwriting mandates.
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