Did former Salomon Smith Barney analyst Jack Grubman upgrade AT&T ( T) to a buy in April 2000 in an effort to nail down a lucrative investment banking deal for the Citigroup ( C) unit?

That's the object of an expanded investigation by New York Attorney General Eliot Spitzer, according to The Wall Street Journal. The story says Spitzer also wants to know what role, if any, Citigroup Chairman Sanford Weill, and AT&T director, had in influencing Grubman's review of AT&T.

Citigroup's Salomon received about $45 million for its role in underwriting an offering of tracking stock in AT&T's wireless unit, a deal it won only after Grubman upgraded the shares to buy after years of bearish research. Spitzer's investigation is part of a larger probe into whether Wall Street habitually cooked its research in the name of winning investment banking fees and whether this broadly misled investors.

In addition to subpoenaing Grubman and Salomon, Spitzer has asked AT&T for documents concerning the deal and spoken to company executives about how they went about choosing underwriters, the article said.

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