Updated from 8:17 a.m. EST
Jack Grubman said he was lying when as an analyst with
he claimed to have been pushed by CEO Sandy Weill to upgrade shares of
because of a power struggle at the top of the bank.
Grubman was responding to a newspaper story saying that in January 2001, he claimed Weill pushed for the upgrade to curry favor with AT&T CEO C. Michael Armstrong, a key Citigroup board member whose support Weill was seeking in his efforts to oust former Citigroup Chairman John Reed. Reed subsequently left Citigroup in February 2001.
"Regrettably, I invented a story in an effort to inflate my professional importance and make an impression on a colleague and friend," Grubman said in a release. "My research on AT&T was always done on the merits."
In one of the emails, Grubman said he upgraded AT&T because Weill needed the support of Armstrong to "nuke" Reed, the
reported, citing people who have reviewed it. The emails were uncovered by the office of the New York attorney general, Eliot Spitzer, in his probe of analyst conflicts of interest on Wall Street. Spitzer's office reportedly has confirmed the authenticity of the emails but noted they might not accurately reflect the events of the upgrade.
In a statement, Citigroup called the electronic messages "pure fantasy" and said that the suggestion that Weill had pressed for the upgrade to win Armstrong's support is "nonsense."
"The regulators have already received unequivocal sworn testimony from Mr. Grubman that they are 'fabrications' with 'zero basis' in reality," Citigroup said. "We can't comment on why Mr. Grubman wrote them -- you'll have to ask him."