Confessions of a Wall Street Analyst Part 19

CHAPTER 8 8.

1. Bloomberg News, "Michael Jordan Sues MCI over Ad Deal," Los Angeles Times, Los Angeles Times, March 4, 2005, p. C3. March 4, 2005, p. C3.

2. Thor Valdmanis, "German Phone Giant in Talks with Qwest," USA Today, USA Today, March 1, 2000, p. 1B. March 1, 2000, p. 1B.

3. Recorded proceedings of the CSFB Global Telecom CEO Conference, March 610, 2000, the Plaza Hotel, New York City.

4. Ibid.

5. Ibid.

6. Ibid.

7. Andrew Backover, "US West's Trujillo Hangs It Up: 1 Head Better than 2 After Merger, He Decides," Denver Post, Denver Post, March 1, 2000, p. A1. March 1, 2000, p. A1.

8. Recorded proceedings of the CSFB Global Telecom CEO Conference, March 610, 2000, the Plaza Hotel, New York City.

9. Jamey Keaten, "Qwest, US West Are Edgy: After Telekom's Failed Bid, an Uneasy Alliance Could Affect Companies' Stocks," CNN/Money.com, March 10, 2000, http://money.com.cnn/2000/03/10/deals/qwest_a.n.a.lysis.

10. Andrew Kupfer, "Bernie's Big Gamble: Ebbers Wants It All: Voice and Data, Local and Global, Business and Consumers. Sprint May Help Him Get It," Fortune, Fortune, April 17, 2000, p. 178. April 17, 2000, p. 178.

11. Dan Reingold, "WorldCom: There Must Be Some Way Out of Here-But All Lead to Lower Target Prices" (New York: Credit Suisse First Boston, June 27,2000) p. 1.

12. U.S. Department of Justice, "U.S. Justice Department Sues to Block WorldCom's Acquisition of Sprint," press release, June 27, 2000.

13. Peter Elstrom, "The Power Broker," Business Week, Business Week, May 15, 2000, pp. 723. May 15, 2000, pp. 723.

14. Ibid.

15. U.S. Securities and Exchange Commission, "Commission Votes to End Selective Disclosure," 2000112, press release, August 10, 2000.

16. Randall Smith, Deborah Salomon, and Suzanne McGee, "Grubman's Missed Call on AT&T Stock Could Affect Influential a.n.a.lyst's Stature," Wall Street Journal, Wall Street Journal, October 4, 2000, p. C1. October 4, 2000, p. C1.

17. "WorldCom, Inc. Issues New Financial Guidance," press release, November 1, 2000, author's files.

18. Patrick Ross, "WorldCom CEO loses his swagger," CNET news.com, November 1, 2000, http://news.com/2102-1033_3-247973.html.

CHAPTER 9 9.

1. Stephanie N. Mehta, "Can Bernie Bounce Back?" Fortune, Fortune, January 22, 2001, p. 84. January 22, 2001, p. 84.

2. "CSFB's Reingold on Possible WorldCom Sale: a.n.a.lyst Comment," Bloomberg News, March 7, 2001.

3. Christopher Caldwell, "Literary Heroes of the Stock-Market Crash," Daily Standard, Daily Standard, October 3, 2002, no page number available. October 3, 2002, no page number available.

4. Rebecca Blumenstein, "Overbuilt Web: How the Fiber Barons Plunged the Nation into a Telecom Glut," Wall Street Journal, Wall Street Journal, June 18, 2001, p. A1. June 18, 2001, p. A1.

5. Peter Elstrom, "On the Firing Line at Qwest," Business Week, Business Week, October 29, 2001, p. 72; Bill Mann, "Eyes on the Wise," The Motley Fool.com, June 22, 2001, http://aol.fool.com/news/2001/9010622.htm. October 29, 2001, p. 72; Bill Mann, "Eyes on the Wise," The Motley Fool.com, June 22, 2001, http://aol.fool.com/news/2001/9010622.htm.

6. Peter Elstrom, "On the Firing Line at Qwest," Business Week, Business Week, October 29, 2001, p. 72. October 29, 2001, p. 72.

7. Peter Elkind with Mary Danehy, Jessica Sung, and Julie Schlosser, "Where Mary Meeker Went Wrong," Fortune, Fortune, May 14, 2001, p. 68. May 14, 2001, p. 68.

8. Gretchen Morgenson, "S.E.C. Warns Investors on a.n.a.lysts," New York Times, New York Times, June 30, 2001, p. C1. June 30, 2001, p. C1.

CHAPTER 10 10.

1. Julie Creswell with Nomi Prins, "The Emperor of Greed; With the Help of His Bankers, Gary Winnick Treated Global Crossing as His Personal Cash Cow-Until the Company Went Bankrupt," Fortune, Fortune, June 24, 2002, p. 106. June 24, 2002, p. 106.

2. Gretchen Morgenson and Timothy L. O'Brien, "When Citigroup Met WorldCom," New York Times, New York Times, May 16, 2004, sec. 3, p. 1. May 16, 2004, sec. 3, p. 1.

3. Geraldine Fabrikant, "As Shares Sink, Some Executives Shed Costly Toys," New York Times, New York Times, March 24, 2002, sec. 3, p. 7. March 24, 2002, sec. 3, p. 7.

4. Emily Thornton with Peter Elstrom in New York and Mike McNamee in Washington, "Trying to Build a Wall on Wall Street: How Far Will New York Attorney General Eliot Spitzer Be Able to Separate Research a.n.a.lysts and Investment Bankers?," Business Week, Business Week, April 29, 2002, p. 40. April 29, 2002, p. 40.

5. Jack Grubman, "WCOM: Dramatic Change in EBITDA Guid. Too Much to Ignore-Downgrade to Neutral" (New York: Salomon Smith Barney, April 21,2002).

6. Kris Hudson and Miles Moffeit, "Unmasking Qwest," Denver Post, Denver Post, December 17, 2002, p. A1. December 17, 2002, p. A1.

7. "SEC Files Charges Against Ex-Qwest Chief Nacchio," Wall Street Journal, Wall Street Journal, March 15, 2005. March 15, 2005.

8. Securities and Exchange Commission, Plaintiff, vs. Joseph P. Nacchio, Robert S. Woodruff, Robin R. Szeliga, Afshin Mohebbi, Gregory M. Casey, James J. Kozlowski, Frank T. Noyes, Securities and Exchange Commission, Plaintiff, vs. Joseph P. Nacchio, Robert S. Woodruff, Robin R. Szeliga, Afshin Mohebbi, Gregory M. Casey, James J. Kozlowski, Frank T. Noyes, Civil Action No. 05-MK-480 (OES), March 15,2005. Civil Action No. 05-MK-480 (OES), March 15,2005.

9. U.S. Congress House Committee on Financial Services Hearing, Wrong Numbers: The Accounting Problems at WorldCom, Wrong Numbers: The Accounting Problems at WorldCom, serial no. 10774, July 8, 2002, 1st session. serial no. 10774, July 8, 2002, 1st session.

10. Jared Sandberg, "Bernie Ebbers Bet the Ranch-Really-on WorldCom Stock," Wall Street Journal, Wall Street Journal, April 12, 2002 (as retransmitted by the a.s.sociated Press). April 12, 2002 (as retransmitted by the a.s.sociated Press).

11. Steven Rosenbush with Heather Timmons, Roger O. Crockett, Christopher Palmieri, and Charles Haddad, "Inside the Telecom Game: How Salomon's Jack Grubman Wheeled and Dealed with WorldCom, Qwest, Global Crossing, and Others," Business Week, Business Week, August 5, 2002, pp. 3440. August 5, 2002, pp. 3440.

12. Charles Gasparino, Blood on the Street: The Sensational Inside Story of How Wall Street a.n.a.lysts Duped a Generation of Investors Blood on the Street: The Sensational Inside Story of How Wall Street a.n.a.lysts Duped a Generation of Investors (New York: Free Press, 2005), p. 276. (New York: Free Press, 2005), p. 276.

13. Gretchen Morgenson, "Bullish a.n.a.lyst of Tech Stocks Quits Salomon," New York Times, New York Times, August 16, 2002, p. A1. August 16, 2002, p. A1.

14. Citigroup, "Telecom a.n.a.lyst Jack Grubman to Leave Salomon Smith Barney," press release, August 15, 2002.

15. Securities and Exchange Commission, Plaintiff vs. Joseph P. Nacchio, Robert S. Securities and Exchange Commission, Plaintiff vs. Joseph P. Nacchio, Robert S. Woodruff, Robin R. Szeliga, Afshin Mohebbi, Gregory M. Casey, James J. Kozlowski, Frank T. Noyes, Civil Action No. 05-MK-480 (OES), March 15, 2005. Woodruff, Robin R. Szeliga, Afshin Mohebbi, Gregory M. Casey, James J. Kozlowski, Frank T. Noyes, Civil Action No. 05-MK-480 (OES), March 15, 2005.

16. Much of the material in this section comes from the following stories: Charles Gasparino, "Grubman Boast: AT&T Upgrade Had an Altogether Different Goal," Wall Street Journal, Wall Street Journal, Nov. 13, 2002, p. A1; Charles Gasparino, "Citigroup Investigation Leads to Door of Elite Nursery School," Nov. 13, 2002, p. A1; Charles Gasparino, "Citigroup Investigation Leads to Door of Elite Nursery School," Wall Street Journal, Wall Street Journal, November 14, 2002, p. A1; Gretchen Morgenson and Patrick McGeehan, "Wall St. and the Nursery School: A New York Story," November 14, 2002, p. A1; Gretchen Morgenson and Patrick McGeehan, "Wall St. and the Nursery School: A New York Story," New York Times. New York Times. November 14, 2002, p. A1; Patrick McGeehan, "More Details On Message By Ex-a.n.a.lyst For Citigroup," November 14, 2002, p. A1; Patrick McGeehan, "More Details On Message By Ex-a.n.a.lyst For Citigroup," New York Times, New York Times, November 15, 2002, p. C1; and Charles Gasparino, "Ghosts of E-Mails Continue to Haunt Wall Street," November 15, 2002, p. C1; and Charles Gasparino, "Ghosts of E-Mails Continue to Haunt Wall Street," Wall Street Journal, Wall Street Journal, November 18, 2002, p. C1. November 18, 2002, p. C1.

17. Charles Gasparino, "Ghosts of E-Mails Continue to Haunt Wall Street," Wall Street Journal, Wall Street Journal, November 18, 2002, p. C1. November 18, 2002, p. C1.

18. This and following quotes from Charles Gasparino, Blood on the Street: The Sensational Inside Story of How Wall Street a.n.a.lysts Duped a Generation of Investors Blood on the Street: The Sensational Inside Story of How Wall Street a.n.a.lysts Duped a Generation of Investors (New York: Free Press, 2005), pp 16768. (New York: Free Press, 2005), pp 16768.

19. E-mail in Attorney General of the State of New York Bureau of Investment Protection, In the Matter of Jack Benjamin Grubman. a.s.surance of Discontinuance Pursuant to Executive Law Section In the Matter of Jack Benjamin Grubman. a.s.surance of Discontinuance Pursuant to Executive Law Section 63 (15). April 21, 2003. Exhibit 1. 63 (15). April 21, 2003. Exhibit 1.

20. Attorney General of the State of New York Bureau of Investment Protection, In the Matter of Jack Benjamin Grubman. a.s.surance of Discontinuance Pursuant to Executive Law Section In the Matter of Jack Benjamin Grubman. a.s.surance of Discontinuance Pursuant to Executive Law Section 63 (15). April 21, 2003. Exhibit 1. 63 (15). April 21, 2003. Exhibit 1.

21. Citigroup, "Statements are Released by Weill and Citigroup," press release, November 13, 2002.

22. Letter from Jack Grubman to C. Michael Armstrong, Chairman and CEO, AT&T, August 19, 1999, in Attorney General of the State of New York Bureau of Investment Protection, In the Matter of Citigroup Global Markets Inc. (formerly known as Salomon Smith Barney Inc.). a.s.surance of Discontinuance Pursuant to Executive Law Section In the Matter of Citigroup Global Markets Inc. (formerly known as Salomon Smith Barney Inc.). a.s.surance of Discontinuance Pursuant to Executive Law Section 63 (15). April 21, 2003. Exhibit 1. 63 (15). April 21, 2003. Exhibit 1.

23. Quotes in this section come from a memo to Sanford I. Weill from Jack B. Grubman, dated November 5, 1999, re: "AT&T and the 92nd Street Y," in Attorney General of the State of New York Bureau of Investment Protection, In the Matter of Jack Benjamin Grubman. a.s.surance of Discontinuance Pursuant to Executive Law Section In the Matter of Jack Benjamin Grubman. a.s.surance of Discontinuance Pursuant to Executive Law Section 63 (15). April 21, 2003. Exhibit 1. 63 (15). April 21, 2003. Exhibit 1.

24. E-mail dated November 29, 1999, re: "Urgent Message from Jack Grubman re: AT&T Report" in Attorney General of the State of New York Bureau of Investment Protection, In the Matter of Jack Benjamin Grubman. a.s.surance of Discontinuance Pursuant to Executive Law Section 63 (15) In the Matter of Jack Benjamin Grubman. a.s.surance of Discontinuance Pursuant to Executive Law Section 63 (15). April 21, 2003. Exhibit 1. The e-mail reads: "John/Bob, The AT&T Report must be edited and mailed out to the printers today so it can be distributed in time to meet Sandy Weill's deadline (before the AT&T meeting)."

25. U.S. District Court for the Southern District of New York, SEC vs. Jack Benjamin Grubman, SEC vs. Jack Benjamin Grubman, April 28, 2003, p. 20. April 28, 2003, p. 20.

26. Internal memo to Senior Management Team of AT&T from Connie Weaver, "Lehman Brothers First Call Note," May 18, 2000, in Attorney General of the State of New York Bureau of Investment Protection, In the Matter of Jack Benjamin Grubman. a.s.surance of Discontinuance Pursuant to Executive Law Section In the Matter of Jack Benjamin Grubman. a.s.surance of Discontinuance Pursuant to Executive Law Section 63 (15). April 21, 2003. Exhibit 1. 63 (15). April 21, 2003. Exhibit 1.

27. Citigroup, "Statements are Released by Weill and Citigroup," press release, November 13, 2002.

28. Charles Gasparino, Blood on the Street: The Sensational Inside Story of How Wall Street a.n.a.lysts Duped a Generation of Investors Blood on the Street: The Sensational Inside Story of How Wall Street a.n.a.lysts Duped a Generation of Investors (New York: Free Press, 2005), pp. 166, 169, and 289. (New York: Free Press, 2005), pp. 166, 169, and 289.

29. Charles Gasparino, Blood on the Street: The Sensational Inside Story of How Wall Street a.n.a.lysts Duped a Generation of Investors Blood on the Street: The Sensational Inside Story of How Wall Street a.n.a.lysts Duped a Generation of Investors (New York: Free Press, 2005), pp. 287 and 294. (New York: Free Press, 2005), pp. 287 and 294.

30. Daniel Dunsief, "s.e.xy E-mails Heat Up Wall Street Probe," New York Daily News, New York Daily News, November 15, 2002. November 15, 2002.

31. Office of New York State Attorney General Eliot Spitzer, "SEC, NY Attorney General, NASD, NASAA, NYSE and State Regulators Announce Historic Agreement to Reform Investment Practices," press release, December 20,2002.

32. Janet Guyon, "Jack Grubman Is Back: Just Ask Him," Fortune, Fortune, May 16, 2005, p. 118. May 16, 2005, p. 118.

EPILOGUE.

1. Michael Gormley, "Former Qwest Exec to Pay $4.4 Million for IPO Perk," the a.s.sociated Press, May 14, 2003.

2. Christopher Palmieri, "Media Wildcatter," Business Week, Business Week, April 25, 2005, p. 100. April 25, 2005, p. 100.

3. Robert Johnson, "Back to College, Still in the Fray," New York Times, New York Times, May 22, 2005, sec. 3, p. 2. May 22, 2005, sec. 3, p. 2.

4. http://www.level3.com/603.html.

5. Mark Landler and Jenny Anderson, "Credit Suisse Rallies Its U.S. Troops," International Herald Tribune, International Herald Tribune, February 24, 2005, p. 1. February 24, 2005, p. 1.

6. Josee Valcourt, "Health, Record Affect Prison Selection," Clarion-Ledger, Clarion-Ledger, July 14, 2005, p. A4. July 14, 2005, p. A4.

7. Federal Bureau of Prisons, "Program Statement on Visiting Regulations," April 14, 2003.

8. Lisa Stein, "Throwing the Book at a Crooked CEO," U.S. News and World Report, U.S. News and World Report, July 25, 2005, p. 11. July 25, 2005, p. 11.

9. David Hayes and Suzanne King, "Sprint Gives Ousted CEO Millions in Severance Deal," Kansas City Star, Kansas City Star, June 12, 2003, p. A1. June 12, 2003, p. A1.

10. Janet Guyon, "Jack Grubman Is Back: Just Ask Him," Fortune, Fortune, May 16, 2005, p. 118. May 16, 2005, p. 118.

11. Michael J. Martinez, "Mack Returns to Morgan Stanley as CEO," the a.s.sociated Press, July 1, 2005.

12. Sandy Sh.o.r.e, "SEC Files Charges Against Ex-Qwest CEO," the a.s.sociated Press, March 16, 2005.

13. Al Lewis, "Did Nacchio Pa.s.s 4-Way Test? No Way," Denver Post, Denver Post, March 15, 2005, p. C1. March 15, 2005, p. C1.

14. Sandy Sh.o.r.e, "Judge Grants 45-Day Delay in Qwest Evidence Exchange," the a.s.sociated Press, July 27, 2005.

15. http://www.qwest.com/about/company/management/notebaert.html.

16. Robert Gearty, "Quattrone Guilty on All Counts," New York Daily News, New York Daily News, May 4, 2004, p. 65. May 4, 2004, p. 65.

17. Walter Hamilton, "Banker's Appeal Is Heard," Los Angeles Times, Los Angeles Times, July 13, 2005, p. C3. July 13, 2005, p. C3.

18. Erin McClam, "Final WorldCom Ex-Director Settles Suit," the a.s.sociated Press, March 21, 2005.

19. http://newscenter.verizon.com/speeches/bio_ivan.vtml.

20. Samuel Maull, "Ex-Broker Sihpol Is Acquitted on 29 Counts," the a.s.sociated Press, June 9, 2005.

21. Erin McClam, "Five Years in Prison for WorldCom CFO," the a.s.sociated Press, Aug. 12, 2005.

22. Ken Belson, "Ex-Worldcom Executive Forfeits Florida Mansion," New York Times, New York Times, July 27, 2005, p. C3. July 27, 2005, p. C3.

23. Alexandra Clough, "Mystery Buyer Has $9.7 Million Contract for Deal to Buy Sullivan House," Palm Beach Post, Palm Beach Post, August 7, 2005, p. 1F. August 7, 2005, p. 1F.

24. Sandy Sh.o.r.e, "Ex-Qwest CFO Pleads Guilty to Insider Trading Charge," the a.s.sociated Press, July 14, 2005.

25. http://www.telstra.com.au/abouttelstra/investor/docs/sol_trujillo_bio.pdf.

26. Ben White, "Weill to Yield CEO Post, Stay Citigroup Chairman," Washington Post, Washington Post, July 17, 2003, p. E1. July 17, 2003, p. E1.

27. Mitch.e.l.l Pacelle and Monica Langley, "Weill's Perks Create Obstacles," Wall Street Journal, Wall Street Journal, July 20, 2005, p. C1. July 20, 2005, p. C1.

28. Matt Miller, "Deal Sense," Daily Deal, Daily Deal, June 13, 2005. June 13, 2005.