House to Subpoena Citigroup Unit
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A House committee plans to subpoena information from Citigroup Inc.’s Salomon Smith Barney unit to see if WorldCom Inc. executives received favorable treatment from the investment firm in doling out shares of initial public stock offerings.
The House Financial Services Committee is investigating whether Salomon analyst Jack Grubman sold executives the stock to help win investment banking business. The company has said privacy laws prevented it from providing the data on people who bought the stock.
“The subpoena will solve that problem,” said Peggy Peterson, a spokeswoman for Rep. Michael G. Oxley (R-Ohio), who heads the panel.
Democrats and Republicans have said they remain unsatisfied with Grubman’s response at a committee hearing last month that he didn’t recall whether former WorldCom CEO Bernard J. Ebbers and other executives had been allowed to buy newly offered shares that were sure bets.
WorldCom filed the largest U.S. bankruptcy last month after revealing it hid billions in expenses. Lawmakers have accused Grubman of not scrutinizing WorldCom’s finances because of his close relationship with Ebbers.
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