Jack Grubman Defends His Actions

from the he's-the-color-analyst dept

Since no one from Worldcom seems willing to talk, Congress turned their anger towards famed Salomon Smith Barney telecom analyst Jack Grubman, who kept saying Worldcom’s stock should be valued at $120 as it continued to sink lower and lower and lower. In responding to the congressional committee, Grubman claims he did nothing wrong in promoting Worldcom (and other telecom stocks), saying he absolutely believed in their potential. He claims that, although he was paid partly based on how much banking business he brought in, this did not cloud his judgment in any way. There was also the surprising revelation that Grubman attended various Worldcom board meetings to give his thoughts (as he says “offering market color”) on how people would react to certain moves by Worldcom – which certainly puts into question his “independence” as an analyst. Rep. Barney Frank had the best response to this, saying, “The market color? What are you, Phil Rizzuto? What do you mean, ‘the market color’? … I don’t understand — you do the chatter? What does that mean?”

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