Star-Analyst Grubman wirft das Handtuch - 500 Beiträge pro Seite

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Er war der mächtigste Analyst der Wall Street, Jack Grubman. Doch mit seinen Aktien-Tipps trieb er viele in den Ruin.

Grubman, der Telekom-Experte der Wall Street. „King of Telecom“ wurde er genannt, war mit einem Gehalt von 20 Millionen Dollar im Jahr der bestbezahlte Analyst Manhattans. Doch als Worldcom auf den Abgrund zusteuerte, warnte er nicht, im Gegenteil. Er empfahl die Aktie noch zum Kauf, als der Niedergang des Konzerns längst unaufhaltsam war. So wie er auch den Telekom-Wert Global Crossing nach oben schrieb, Qwest, und Winstar.

Jetzt hat Grubman das Handtuch geschmissen und bei seinem Arbeitgeber Salomon Smith Barney gekündigt. In einer Erklärung schrieb er: "Die anhaltende Kritik an meiner Person macht es mir nicht möglich, meine Arbeit so zu machen, wie es erforderlich wäre."

Wertpapiere des Artikels:
WORLDCOM INC. DL-,01


Autor: (© wallstreet:online AG / SmartHouse Media GmbH),08:00 16.08.2002

[junkstro]

aus der ny times :




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August 16, 2002
After Criticism, a Top Analyst Quits Salomon
By GRETCHEN MORGENSON


ack Grubman, the beleaguered telecommunications analyst who was once among the most powerful figures on Wall Street, resigned from Salomon Smith Barney yesterday by what the firm described as "mutual agreement."

During the bull market in technology shares, no one was more euphoric about the promise of upstart telecommunications companies than Mr. Grubman. And he remained upbeat on most of the companies he followed long after their fortunes had declined and even as they sank into bankruptcy.

An estimated $2 trillion has been lost by investors and lenders who put money into the telecommunications industry. Of the 25 largest bankruptcy filings in the United States, 10 have been made by telecommunications companies. Mr. Grubman recommended the stocks of all of them.

Mr. Grubman and his firm fared much better. Acting not only as an analyst recommending stocks to investors but also as an adviser to telecommunications companies on strategy, Mr. Grubman helped his firm win almost $1 billion in fees during the late 1990`s. He earned an average of $20 million annually in recent years.

But with his dual roles he also came to personify the conflicts of interest at brokerage firms that have done significant damage to investor confidence in recent months.

In the letter of resignation he submitted to the firm, Mr. Grubman said that his work as an analyst was now being extensively second-guessed and that the current criticism made it impossible for him to do his job. While he said he regretted that he had failed to predict the collapse of the telecommunications industry, he said, "I am nevertheless proud of the work I, and the analysts who worked with me, did." He added that he felt he had been unfairly singled out for criticism.

In a memo to Salomon employees, Michael A. Carpenter, the firm`s chairman, called Mr. Grubman a "valued member of our research team" and said the analyst had always conducted himself professionally and in accordance with legal and ethical standards.

On leaving, Mr. Grubman will receive what remains of a lucrative five-year contract struck in 1998, according to a person who has seen the agreement. A $19 million loan will be forgiven and he will receive approximately $12 million of stock in Citigroup, which owns Salomon. By choosing to leave at a time when Citigroup`s shares are languishing — they are down 29 percent on the year — Mr. Grubman is walking away from a lot of money he could have had if he had stayed another year and the stock had recovered.

A spokesman for Citigroup said the firm would continue to pay Mr. Grubman`s legal bills.

Mr. Grubman`s activities are being investigated by securities regulators and by Eliot Spitzer, the New York attorney general. Mr. Grubman is also the subject of numerous lawsuits by investors who bought shares on his recommendation in companies, including Rhythm Netconnections, Winstar Communications and Global Crossing, that are now bankrupt.

Mr. Grubman`s departure had been widely rumored for months. People inside the firm said that Sanford I. Weill, the chairman of Citigroup, was disappointed in Mr. Grubman`s testimony before Congress in July. The House Financial Services Committee, which is investigating the collapse of WorldCom, had asked Mr. Grubman to testify about his role as the prominent analyst in the industry.

Mr. Grubman`s ardor was especially steadfast for WorldCom, a company he helped create by advising its founder, Bernard J. Ebbers, on many of its 65 acquisitions. Mr. Grubman recommended buying WorldCom`s stock until just a few days before the company announced in late June the enormous accounting misstatement that helped force it into bankruptcy.

"Mr. Grubman`s departure could be very favorable for investors suing him and Salomon Smith Barney and could open up opportunities for regulators as well as criminal prosecutors," said Lewis D. Lowenfels, an expert in securities law at Tolins & Lowenfels in New York. "Now you have a situation where the firm`s position and Mr. Grubman`s may not be consistent and therefore may not be mutually reinforcing. This could have unfavorable implications for the defenses which both the firm and Mr. Grubman intend to mount."

Mr. Grubman had extraordinarily close ties to the companies he followed. According to a document released by the House committee, he attended 10 board meetings at several companies in the late 1990`s, including WorldCom, McLeodUSA and Broadwing. It is highly unusual for analysts to attend company board meetings.

For years Mr. Grubman`s advocacy for the telecommunications industry helped win his firm the top rank among investment banking firms in the sector. Between 1997 and 2001, Salomon collected $809 million underwriting telecommunications stocks and bonds and $178 million providing merger advice, according to Thomson Financial. The total was 43 percent more than the fees made by Merrill Lynch, its closest rival in the sector.

Among the telecommunications companies Salomon brought public or underwrote securities for in the period were Global Crossing, Metromedia Fiber Networks, McLeodUSA, Winstar Communications, Qwest Communications, Flag Telecom Holdings, Rhythms Netconnections and XO Communications. All but one of these companies — Qwest — has filed for bankruptcy.

Mr. Grubman`s significance at Salomon was reminiscent of that of a powerful figure at a different firm back in the 1980`s. "Salomon Smith Barney set out to dominate the telecom business," said Jeffrey L. Liddle, a partner at Liddle & Robinson in New York who is representing several former Salomon employees in cases against the firm. "The last time a firm did this was Drexel Burnham Lambert with Michael Milken."

Mr. Grubman`s rise, and perhaps his fall, has much to do with the uniquely collaborative and symbiotic relationship between Mr. Ebbers at WorldCom and Mr. Grubman, his sponsor, banker and promoter. During the 1980`s Mr. Ebbers established himself as an entrepreneur bent on building a company through many acquisitions of companies reselling long-distance service.

Even when he was a little-known analyst at PaineWebber, Mr. Grubman quickly saw the potential in Mr. Ebbers` acquisition plans, according to people who know him. The plans would mean considerable banking fees for the brokerage firm that won the assignment, and Mr. Grubman also liked the idea of a small upstart like Mr. Ebbers taking on the torpid and monopolistic Bell operating companies.

In 1996, the Telecommunications Act came about. Intended to increase competition in the telecommunications industry, the law unleashed a flock of entrepreneurs eager to build huge networks crisscrossing the globe to serve the big jumps in demand for data transmission that were being predicted.

No one was more certain than Mr. Grubman that this demand was going to be explosive and that the companies most likely to profit from it would be new entrants unencumbered by the bureaucratic mentality common among established companies. He proselytized this view with institutional investors across the country in speech after speech.

Naturally, Mr. Grubman attracted the attention of entrepreneurs who shared his beliefs and hoped that his firm, Salomon Smith Barney, would help them sell their securities to the public.

Not every telecommunications chief executive could persuade him to do so. Howard S. Jonas is chairman of the IDT Corporation, a telecommunications services provider that has survived the carnage in the industry and is profitable. He said of Salomon: "I tried to go to Jack and say we`re the best of our peers and we`re solvent, but I couldn`t get in his office. If you had big merger-and- acquisition opportunities, then you had a chance. Once you got inside then you were sort of protected. Mergers were arranged between you."

But the demand for the vast telecommunications networks that Mr. Grubman and others predicted never materialized. One by one, the fledgling companies began failing, leaving investors with enormous losses.

"Jack Grubman ignored obvious signs of trouble at WorldCom, including repeated downgrades by credit- rating agencies," said Martin Weiss, chairman at Weiss Ratings Inc., an independent research firm. "He was clearly a leading proponent of WorldCom shares, almost to the bitter end, despite abundant signs of trouble."

Citigroup also announced several management changes involving Salomon Smith Barney yesterday, intended to further separate the firm`s investment banking and equity research businesses. Equity research will now report to Robert Druskin, a 33-year veteran of Citigroup, who was named president and chief operating officer of Salomon, a new position at the firm. The investment banking business will still report directly to Mr. Carpenter, the Salomon chairman.




Copyright 2002 The New York Times