NEW YORK - Jack Grubman, a former Salomon Smith Barney analyst, says that e-mail he wrote asserting that he altered his research as part of a deal to help Citigroup Inc.'s chairman and chief executive, Sanford I. Weill, oust his former co-CEO, John Reed, was a fabrication created to impress a business associate.
Citi and Mr. Grubman issued press statements on Wednesday in response to reports that New York Attorney General Eliot Spitzer had discovered e-mail hinting at a quid pro quo between Mr. Weill, Mr. Grubman, and Michael Armstrong, the chairman of AT&T Corp. The collusion rumor was first mentioned on CNBC last week.
In the e-mail, Mr. Grubman claimed that he changed his rating on AT&T to help Mr. Weill persuade Mr. Armstrong - a member of Citi's board - to vote in favor of Mr. Reed's ouster.
Mr. Grubman said Wednesday that he invented the scenario to make himself look important.
"Regrettably, I invented a story in an effort to inflate my professional importance and make an impression on a colleague and friend," he said in his press statement. "My research on AT&T was always done on the merits. It was not designed to help Salomon Smith Barney get investment banking business, nor was it designed to influence Mike Armstrong's vote on Citigroup board matters."
In the Citi statement, Mr. Weill reiterated his assertion that he never pressured Mr. Grubman to change his rating.
"There was absolutely no connection between these events," Mr. Weill said. "I have said before, and will say again: I never told any analyst what he or she had to write - and I never would, nor would I ever attempt to manipulate a board member's vote."
Citi's stock fell 4% on Wednesday.
