It took more than two years, but Wall Street's cops have finally taken action against two former supervisors of disgraced telecom analyst Jack Grubman.

In a settlement with three regulatory agencies, John Hoffmann and Kevin McCaffrey agreed to pay fines of $120,000 and abide by 15-month suspensions from supervisory roles in the securities business. Each former

Citigroup

(C) - Get Report

executive also will pay $1 in restitution.

Hoffmann was the former head of Citigroup's global stock research team at Salomon Smith Barney. McCaffrey was the division's director of stock research.

Hoffman hasn't worked at Citigroup for years, having left before the bank agreed to pay a $400 million penalty in April 2003 to settle allegations of issuing biased stock research. McCaffrey is employed in a different capacity. Both men settled without admitting or denying the allegations.

Under Sarbanes Oxley, the SEC must impose some amount of restitution, even a nominal amount like a $1, in order for the fine to go to investor restitution.

The penalty paid by Citigroup was the biggest of the 10 firms that forked over $1.3 billion in fines and restitution as part of the conflicted research settlement negotiated by the

Securities and Exchange Commission

, the

NASD

and dozens of state attorneys general.

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In an attempt to put the research scandal behind it, Citigroup dropped the Salomon name shortly after agreeing to the settlement and revived the old Smith Barney name for its retail brokerage operation.

Grubman, meanwhile, paid a $15 million fine and agreed to be banned from the securities industry for life for issuing baseless research reports on many of the telecom stocks he covered. The former analyst, who is still a wealthy man, now works as a telecom industry consultant.

In many respects, the actions against Hoffman and McCaffrey are long overdue. In June 2003, the SEC served subpoenas on a slew of Wall Street firms, specifically seeking information on supervisors of particular analysts and accelerating the second phase of their crackdown on biased research reports.

With much fanfare, SEC officials promised to pursue enforcement actions against the supervisors of high-profile analysts like Grubman and former Merrill Lynch Internet stock guru Henry Blodget, who also paid a $4 million fine and was banned from working on Wall Street for life.

Blodget has been more successful than Grubman in restoring his reputation. This month he is the author of the cover story in

New York

magazine and reported on the Martha Stewart criminal trial for the online magazine

Slate

.

But sources say the actions against Hoffmann and McCaffrey are most likely the only actions against supervisors the SEC will bring. No other top Citigroup executive who had supervised Grubman has ever received a Wells notice from the SEC, a notification of an intent to pursue civil charges.

In fact, Hoffmann and McCaffrey received their Wells notices from regulators right around the time of the $1.3 billion settlement.

But Hoffmann and McCaffrey weren't alone in supervising Grubman. The once high-profile analyst -- who also dabbled as an investment banking consultant to big telecoms like WorldCom -- reported to Eduardo Mestre, the head of global investment banking at Salomon.

"Jack Grubman was one of more than 300 analysts worldwide for whom John Hoffmann was responsible,'' said Hoffman's attorney, John Harris of Stillman & Friedman. "Sadly, Mr. Grubman's actions have stained the reputations of the many superb analysts at Salomon Smith Barney and undermined the research integrity Mr. Hoffmann sought to maintain during his entire career in the securities business."

McCaffrey's attorney could not be reached for comment.