Back in the late 1990’s, Jack Grubman of then Salomon Smith Barney was the hottest telecom analyst on Wall Street. Back then he was reportedly earning around $20 million a year.
However, all of that quickly turned as he continued to recommend clients buy telecom stocks as prices tumbled.
Investigations ensued, conflicts of interest were uncovered, and eventually Grubman was banned from the industry by the SEC.
One email about then-Citi CEO Sandy Weill and Grubman’s kids got out that really raised eyebrows. From the New York Observer:
The smoking gun was a 2001 email to a friend: “You know everyone thinks I upgraded [AT&T] to get lead for [AT&T Wireless]. Nope. I used Sandy to get my kids in 92nd ST Y pre-school (which is harder than Harvard) and Sandy needed Armstrong’s vote on our board to nuke Reed in showdown. Once coast was clear for both of us (ie Sandy clear victor and my kids confirmed) I went back to my normal negative self on [AT&T]. Armstrong never knew that we both (Sandy and I) played him like a fiddle.”
This morning, Grubman appeared on CNBC’s Squawk Box to talk telecoms. Here’s one memorable quote that came out of the appearance:
Grubman on @squawkcnbc: “I would argue nothing has changed on Wall Street since I left.”
— Squawk Box (@SquawkCNBC) May 31, 2013