Jack Grubman

Last updated

Jack Benjamin Grubman is an American former managing director of Salomon Smith Barney and the lead research analyst for the telecommunications sector.

Contents

Personal life

He was born in Northeast Philadelphia, Pennsylvania, to Isador and Mildred Grubman. His father worked for the City of Philadelphia Sanitation Department, while his mother worked at a home as dressmaker. He holds a bachelor's degree in mathematics (cum laude) from Boston University and a master's degree in probability theory from Columbia. [1]

Career

In 1977, he started work at AT&T. In 1985, he moved to PaineWebber. By 1994, he was making a million dollars a year and moved to Salomon Brothers. During this period, he was the most important analyst of the telecommunications industry during a time of great upward activity in the sector. In 1998 when Salomon Brothers became Salomon Smith Barney, he was the managing director and became Head of Global Telecommunications Research. As a result, Grubman became the highest paid analyst on Wall Street; earning $25 million per year from 1998 through 2002. [1]

The sector reached a peak by 2001, however Grubman still made public statements calling for investors to buy. In March 2001, he listed ten stocks in the sector to buy of which five were selling for less than a dollar per share a year later. [1] It was his activities during these years that led him into legal problems. [1]

The commission found that from 1999 to 2001, Grubman had issued research reports and other documents that concealed material facts and which misled investors. [2]

In 1999, he upgraded his opinion of AT&T stock from "neutral" to "buy". In a 2001 e-mail, Grubman explained the change was part of a plan to get his children into the 92nd Street YM-YWHA's preschool program. [3]

Grubman was advising both telecoms firms such as Global Crossing and investors at the same time. [1] This was an obvious conflict of interest. In April, 2003, the U.S. Securities and Exchange Commission banned Grubman from financial industry for life for misconduct. Grubman was also required to pay a $15 million fine. [2] According to an article in Forbes , Grubman had a net worth of about $75 to $100 million after paying the fine. [3]

In 2004, he was hired by Distinctive Devices as a consultant, a move that increased the stock price of the firm. [4]

In 2003, he formed Magee Group, LLC. A consulting firm that specializes in advising and/or strategic consulting in both telecommunications and technology companies. Especially focusing on those companies developing enabling applications/technologies in the IP, wireless, broadband and next generation network areas.[ citation needed ][ promotional language ]

As of August 2011, he was a managing partner at the Magee Group. [5]

Related Research Articles

<span class="mw-page-title-main">Morgan Stanley</span> American financial services company

Morgan Stanley is an American multinational investment management and financial services company headquartered at 1585 Broadway in Midtown Manhattan, New York City. With offices in 41 countries and more than 75,000 employees, the firm's clients include corporations, governments, institutions, and individuals. Morgan Stanley ranked No. 61 in the 2021 Fortune 500 list of the largest United States corporations by total revenue.

<span class="mw-page-title-main">Citigroup</span> American multinational investment bank and financial services corporation

Citigroup Inc. or Citi is an American multinational investment bank and financial services corporation headquartered in New York City. The company was formed by the merger of banking giant Citicorp and financial conglomerate Travelers Group in 1998; Travelers was subsequently spun off from the company in 2002. Citigroup owns Citicorp, the holding company for Citibank, as well as several international subsidiaries. Citigroup is incorporated in Delaware.

The mutual fund scandal of 2003 was the result of the discovery of illegal late trading and market timing practices on the part of certain hedge fund and mutual fund companies.

A financial analyst is a professional, undertaking financial analysis for external or internal clients as a core feature of the job. The role may specifically be titled securities analyst, research analyst, equity analyst, investment analyst, or ratings analyst. The job title is a broad one: in banking, and industry more generally, various other analyst-roles cover financial management and (credit) risk management, as opposed to focusing on investments and valuation; these are also discussed in this article.

<span class="mw-page-title-main">Lazard</span> American investment bank

Lazard Ltd is a financial advisory and asset management firm that engages in investment banking, asset management and other financial services, primarily with institutional clients. It is the world's largest independent investment bank, with principal executive offices in New York City, Paris and London.

<span class="mw-page-title-main">Salomon Brothers</span> Former American investment bank

Salomon Brothers, Inc., was an American multinational bulge bracket investment bank headquartered in New York. It was one of the five largest investment banking enterprises in the United States and the most profitable firm on Wall Street during the 1980s and 1990s. Its CEO and chairman at that time, John Gutfreund, was nicknamed "the King of Wall Street".

<span class="mw-page-title-main">Henry Blodget</span> American businessman, investor and journalist

Henry McKelvey Blodget is an American businessman, investor and journalist. He is notable for his former career as an equity research analyst who was senior Internet analyst for CIBC Oppenheimer and the head of the global Internet research team at Merrill Lynch during the dot-com era. Due to his violations of securities laws and subsequent civil trial conviction, Blodget is permanently banned from involvement in the securities industry. Blodget is the CEO of Business Insider.

The Global Analyst Research Settlement was an enforcement agreement reached in the United States on April 28, 2003, between the United States Securities and Exchange Commission (SEC), Financial Industry Regulatory Authority (NASD), New York Stock Exchange (NYSE), and ten of the United States's largest investment firms to address issues of conflict of interest within their businesses in relation to recommendations made by financial analyst departments of those firms.

Morningstar, Inc. is an American financial services firm headquartered in Chicago, Illinois and was founded by Joe Mansueto in 1984. It provides an array of investment research and investment management services.

Dean Witter Reynolds was an American stock brokerage and securities firm catering to a variety of clients. Prior to the company's acquisition, it was among the largest firms in the securities industry with over 9,000 account executives and was among the largest members of the New York Stock Exchange. The company served over 3.2 million clients primarily in the U.S. Dean Witter provided debt and equity underwriting and brokerage as mutual funds and other saving and investment products for individual investors. The company's asset management arm, Dean Witter InterCapital, with total assets of $90.0 billion prior to the acquisition, was one of the largest asset management operations in the U.S.

<span class="mw-page-title-main">Jacobs Solutions</span> American engineering company

Jacobs Solutions Inc. is an American international technical professional services firm. The company provides engineering, technical, professional and construction services, as well as scientific and specialty consulting for a broad range of clients globally, including companies, organizations, and government agencies. Jacobs has consistently ranked No. 1 on both Engineering News-Record (ENR)'s 2018, 2019, 2020 and 2021 Top 500 Design Firms and Trenchless Technology’s 2018, 2019, 2020 and 2021 Top 50 Trenchless Engineering Firms. Its worldwide annual revenue reached over $14 billion in the 2021 fiscal year, and earnings rose to $477 million.

Sell side is a term used in the financial services industry. The three main markets for this selling are the stock, bond, and foreign exchange market. It is a general term that indicates a firm that sells investment services to asset management firms, typically referred to as the buy side, or corporate entities. The sell side and the buy side work hand in hand and each side could not exist without the other. These services encompass a broad range of activities, including broking/dealing, investment banking, advisory functions, and investment research.

<span class="mw-page-title-main">Securities research</span>

Securities research is a discipline within the financial services industry. Securities research professionals are known most generally as "analysts", "research analysts", or "securities analysts"; all the foregoing terms are synonymous. Research analysts produce research reports and typically issue a recommendation: buy ("overweight"), hold, or sell ("underweight"); see target price and trade idea.

Gideon I. Gartner was an American businessman, entrepreneur, educator and philanthropist. Often referred to as the father of the modern analyst industry, he is best known as the founder of Gartner, Inc. a Stamford, Connecticut information technology (IT) research and advisory company.

<span class="mw-page-title-main">Giuliani Partners</span> Security consulting firms

Giuliani Partners LLC is a management consulting and security consulting business founded by former New York City Mayor Rudy Giuliani in January 2002. As of 2020, Dun & Bradstreet estimated that the business had 20 employees and revenues of $6.34 million.

Keefe, Bruyette & Woods, Inc., a Stifel Company, is an investment banking firm headquartered in New York City, specializing exclusively in the financial services sector. KBW's primary business lines include research, corporate finance, equity sales and trading, equity capital markets, debt capital markets, and asset management.

<span class="mw-page-title-main">Winstar Communications</span>

Winstar Communications was an American telecommunications company that provided broadband services to business customers. Winstar owned and operated a broadband network in 60 major markets in the United States, including each of the top 30 U.S. markets and ten markets internationally in Europe, Asia, and Latin America.

Loeb, Rhoades & Co. was a Wall Street brokerage firm founded in 1931 and acquired in 1979 by Sanford I. Weill's Shearson Hayden Stone. Although the firm would operate as Shearson Loeb Rhoades for two years, the firm would ultimately be acquired in 1981 by American Express to form Shearson/American Express and three years later Shearson Lehman/American Express.

David E. Goel is an American hedge fund manager. Goel is the managing general partner of Matrix Capital Management, which he co-founded with pioneering investor Paul Ferri in 1999. Goel is also a protégé of hedge fund manager Julian Robertson.

References

  1. 1 2 3 4 5 Amy Feldman; Joan Caplin (April 25, 2002). "Is Jack Grubman the worst analyst ever?". CNN Money . Archived from the original on October 4, 2003.
  2. 1 2 "The Securities and Exchange Commission, New York Attorney General's Office, NASD and the New York Stock Exchange Permanently Bar Jack Grubman and Require $15 Million Payment".
  3. 1 2 Chloe Malle (March 16, 2010). "Stock-Goosing Grubman to Sell Townhouse for $19.6 M." The New York Observer . Archived from the original on March 9, 2011.
  4. ↑ Morgenson, Gretchen (28 February 2004). "Barred Ex-Analyst is Hired by Small Digital Developer". The New York Times.
  5. ↑ "Star Analysts Are Back (No Autographs, Please)". 20 August 2011.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.