Judgment Approaches for Wall Street

Weill has acknowledged making a phone call to the school on Grubman's behalf and arranging a $1 million donation from Citigroup to the school, but he rejects the notion that he pressured Grubman to boost his recommendation on AT&T at around the same time Citigroup was trying to land a big investment banking deal. Grubman also has denied that Weill pressured him, and he says he invented the story in order to impress his friend.

In fact, several former Salomon employees say it is unlikely that Grubman would have succumbed to pressure from Weill. They say Grubman, who at one time pulled down a salary of $20 million and often threatened to go elsewhere, was one of the few analysts at the firm known to have put phone calls from Weill on hold.

These former Salomon employees suggest that Weill may have gone out of his way to help Grubman get his children admitted to the nursery program at the 92nd Street Y in New York because Weill feared losing one of his firm's biggest rainmakers -- or revenue producers.

But the emails were a major embarrassment for Weill and Citigroup, and there's been speculation that the incident could put pressure on the 69-year-old executive to announce a date for stepping down from the bank. Some even speculate that Spitzer, who sources say has talked to a number of Citigroup board members about his findings, may be pushing for Weill to do just that as part of the settlement negotiations.

Even if Weill does stay on, a settlement could lead to more embarrassing moments for Weill and Citigroup.

Sources say that as part of any deal with Citigroup, Spitzer's office is likely to produce a detailed "statement of facts and findings," which will include a summary of its nearly six-month investigation. The findings will include facts not previously disclosed to the public.