Those who said Jack Grubman would never find work again in this town were partially right. The disgraced telecom analyst who was barred from Wall Street for life, has landed a new job over the river in Fort Lee, N.J.
Distinctive Devices, a network-equipment supplier that sells digital TV technology and telecom gear in Germany, India and Russia, said Friday that it hired Grubman as a strategic adviser.
Earl Anderson, a director of the company, says Grubman will be an outside consultant, not a full-time employee. "He'll be doing marketing and strategy, hopefully hooking us up with some of his contacts," says Anderson.
Grubman's representative did not return a call for comment.
Grubman rose to fame in the '90s as an outspoken advocate for upstart phone companies that he argued would be nimble and innovative enough to unseat giants like
. His enthusiasm for speculative underdogs, combined with a wave of deregulation and a flood of investment money, helped drive some of the highest-soaring stocks of the telecom bubble era.
Though some of his theories proved to be accurate, the overheated investment climate he fostered created an oversupply of network capacity and competitors that well overshot demand for data and phone service.
During the industry's dramatic collapsed, Grubman kept positive ratings on stocks like
, even as he derided the companies in emails to colleagues and certain clients.
Aside from the millions he made and then lost for investors, it was Grubman's dual roles as analyst and investment banker that drew the most attention from securities regulators.
In that role, Grubman helped
dole out lucrative IPO shares to telecom executives like former WorldCom chief Bernie Ebbers and former Qwest CEO Joe Nacchio in the hopes of landing more investment banking business for
Securities and Exchange Commission
has since pushed for a series of reforms aimed at separating the roles of research and investment banking.
Grubman's rainmaker status made him one of the highest-paid analysts on the Street. In one year, he took in $20 million from Citigroup. He left the bank in August 2002 with a $30 million severance package after becoming the poster boy for Wall Street conflicts of interest.
In April, as part of the $1.4 billion global settlement with state and federal regulators, Grubman was fined $15 million and banned from the securities business for life.
Grubman's tarnished reputation isn't an insurmountable challenge for the folks at Distinctive Devices.
"I think on balance it's neutralized by the business we hope he can develop for us," says Distinctive Devices director Anderson.
In a TV interview Friday on
, Distinctive Devices CEO Sanjay Mody denied the Grubman hire was a publicity stunt. He also said Grubman's pay would be based on performance.
Observers point out that many of his most influential contacts have been fired and are facing prosecutors, so it's not clear whether Grubman can expect the same level of financial reward in his second career.