NEW YORK-AT&T Corp. confirmed it received a subpoena from the New York Attorney General’s office in regards to an investigation into whether Citigroup’s Salomon Smith Barney unit artificially raised its rating on AT&T Corp. prior to its initial public offering in 1999 of AT&T Wireless Services Inc. in an attempt secure underwriting fees for the IPO.
The investigation centers around former Salomon Smith Barney analyst Jack Grubman who raised his rating on AT&T to ‘buy” in October 1999, one month before the telecommunications company went ahead with the public offering of AT&T Wireless shares. Grubman was also accused of artificially inflating his rating on now bankrupt WorldCom Inc. just prior to the company reporting billions of dollars in accounting fraud.
