> Disgraced Salomon Smith Barney analyst Jack Grubman was so close to
> WorldCom Chairman Bernie Ebbers that he attended Ebbers' wedding -
> and then expensed the trip to his firm, records obtained by The Post
> show.
>
> A 1999 expense report shows that Grubman racked up a bill of
> $1,111.88 attending the Ebbers nuptials in Jackson, Miss., as well as
> meetings.
>
> Perhaps most incriminating is a stamp on the report indicating that
> the expense may have been covered by Salomon Smith Barney's
> investment banking division, not its research department.
>
It continues to amaze me that all of these relationships get treated as revelations by the media and the government. Like, was everyone at the SEC really a moron or hey, perhaps just looking the other way all these years?
It was and is highly common for analysts or investment bankers or frankly most of Wall Street and probably corporate America to schedule meetings alongside personal excursions so they would get reimbursed by the company. Also, most research department expenses get passed to IBD or equity departments depending on which client they're associated with. So, even if Grubman's expenses were sent to the research department, they'd still have been paid by IBD because most of the money on Wall Street, especially during the bubble, was made through fees paid by IBD clients. Research departments don't bring in fees, IBD does by among other things, using analysts to promote deals. This happened and continues to happens in every single investment bank - and in the uber banks spawned by the Glass Steagall repeal.
And all the rhetoric about separation of the two is complete crap. It was Wall Street who created creative accounting, it can certainly figure out how to move its own expenses and thus, department interdependencies, around its own balance sheet.
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