A Congressional committee has broadened its investigation of Salomon Smith Barney and its former telecommunications analyst, Jack Grubman, to explore their ties to Global Crossing, the bankrupt telecoms company.
Michael Oxley, chairman of the House Financial Services Committee, sent a letter on Wednesday to Citigroup, Salomon's parent company, requesting Mr Grubman's research reports on Global Crossing, records of any board meetings he attended there, and other materials.
Mr Oxley also asked for information about any initial public offerings Salomon might have awarded to Global Crossing executives at below-market prices.
This latter request suggests that investigators are focusing their probe on a practice known as spinning, which was wide-spread on Wall Street during the bull market. It involved handing out shares of sought-after IPOs to top executives with the hope that they would later repay the bank with their company's investment banking business.
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