told two congressmen on Friday that federal privacy laws prevent it from complying with a request for information about any
executives who may have been allocated shares in some hot initial public offerings.
In a letter delivered to the two lawmakers, a Citigroup lawyer says the nation's largest financial-services firm has "nearly completed" the process of determining whether any WorldCom executives were offered shares in IPOs underwritten by Salomon Smith Barney, a division of Citigroup. But it can't release that information without either the permission of the customers involved or a subpoena.
Earlier this week, Rep. Paul Kanjorski (D-Pa.) and Christopher Shays (R-Conn.) asked Salomon to provide information about any so-called "friends and family'' shares that may have been allocated over the past five years to Bernard Ebbers, WorldCom's former chief executive, or any other WorldCom executive or director. Salomon has been the principal underwriter of corporate bonds for the embattled long distance-carrier since 1997.
The possibility Ebbers and other WorldCom executives received hot IPO shares came up during a congressional hearing this week into the alleged $3.8 billion accounting fraud at the Mississippi-based telecommunications company.
Kanjorski's office released copies of the Citigroup letter to the news media Friday afternoon. In a prepared statement, both congressmen said they were disappointed in the bank's response and asked Citigroup to move expeditiously in obtaining the permission of its customers.
One potential compromise is for Citigroup to deliver the information to the National Association of Securities Dealers, which is exempt from the federal privacy provisions.