Signaling that they plan to pursue case of stock research conflict up Wall Street's chain of command, regulators have notified the former global stock research chief at Citigroup Inc.'s securities arm that they plan to charge him with civil rule violations.
John B. Hoffmann left Citigroup's global corporate and investment banking arm this year. He would be the highest-ranking Wall Street executive to face charges for a role in overseeing stock research, which has embroiled Wall Street in regulatory investigations since April of last year.
This April, Citigroup paid the highest penalties of any Wall Street firm, $400 million, to settle charges that its former Salomon Smith Barney unit issued fraudulent and misleading research. Jack Grubman, its former star telecommunications-stock analyst, himself agreed to pay $15 million and be banned from the securities industry for life. Citi and Mr. Grubman agreed to the penalties without admitting or denying wrongdoing.
The National Association of Securities Dealers had notified two other former Salomon research officials, Kevin McCaffrey and Timothy F. Tucker, that they could face similar charges. Mr. McCaffrey and Mr. Tucker remain at Citigroup, which dropped the Salomon Smith Barney name this year.
