Embattled Stock Analyst Resigns

Amid a flurry of corporate scandals and trading scams, Jack Grubman resigned Thursday as telecommunications analyst for Salomon Smith Barney due to growing controversy over his alleged conflicts of interest in touting the shares of WorldCom, Global Crossing and other fallen companies.

In announcing the departure to employees, the company defended the powerful, money-making analyst's work and integrity, but made no mention of the embarrassing investigations into his dual role as stock picker and dealmaker now being conducted the government and securities industry.

"Jack and I agree that recent events have made it difficult for him, both personally and professionally, to stay in a job and industry that we know are important to him," Michael A. Carpenter, the chief executive for the company, a subsidiary of Citigroup, wrote in a letter to employees.

Grubman, whose research reports once sent stock soaring, is now under fire for his unwavering recommendations for companies that were also paying millions of dollars to his firm for investment banking services.

The most notable of those companies were WorldCom and Global Crossing, which had remained bullish almost up until the time that those companies landed in bankruptcy, scandalized by disclosures of deceptive accounting.

"Although he, along with many other experts in the industry, did not anticipate the collapse of the telecommunications sector, we believe that, as he notes in the letter he sent to me, he always wrote what he believed and conducted himself professionally and in accordance with legal and ethical standards," Carpenter wrote.

Grubman has been targeted by at least 40 consumer complaints and lawsuits, many of them related to the WorldCom collapse.

Testifying before the House Financial Services Committee last month, said he had no idea that WorldCom executives hid billions in expenses from investors.