The New York Post reports that Citigroup boss, Sandy Weill, is thought to be preparing for his imminent grilling by New York state attorney general Eliot Spitzer in connection with 'a suspicious upgrade of AT&T' by Salomon Smith Barney's former star telecom analyst, Jack Grubman.
The National Association of Securities Dealers has already questionned Weill about the upgrade, which occurred in 1999, immediately before Citigroup was awarded an underwriting mandate by AT&T for which it was paid $43m in fees. Salomon's Grubman has not previously been hot on AT&T stock.
Weill was on AT&T's board at the time and Michael Armstrong, the chairman of AT&T, was a board member at Citigroup. Weill has since quit the AT&T board to avoid the appearance of conflict. He has always denied wrongdoing.
Spitzer has been looking into the AT&T upgrade for some time now and Weill is thought to have volunteered to testify as, he says, he did not in any way even attempt to pressure Grubman to change his view of AT&T. Grubman had previously described the company as a 'dinosaur'.