Reply #45: (Salomon) Smith Barney and Sanford Weill

[DrDebug]

The Smith Barney story dates back to 19th century Philadelphia, where a young broker, Charles Barney, founded his firm in 1873 and a young investment banker, Edward B. Smith, started his in 1892. These pioneers of the American securities industry helped make Wall Street the world's financial capital. (2)

In 1997 Smith Barney Holdings Inc., the brokerage arm of Travelers Group, is combined with Salomon Inc. to form Salomon Smith Barney Holdings Inc. by Sanford I. Weill who started out his career by working for Bear Stearns. (1) On October 8, 1998 the company becomes part of Citigroup Inc. (2)

Seven World Trade Center originally served as the corporate headquarters of Salomon Brothers. (3). Other unrelated companies like the CIA, Secret Service and the Office of Emergency Management filled in the vacant extra floors.

Salomon Smith Barney sometimes did some things with Kissinger McLarty Associates (4) and Donald H. Rumsfeld is chairman of the Salomon Smith Barney International Advisory Board (5)

9/11
Citigroup, the mother company of Salomon Smith Barney, has been named as one of the pre-9/11 inside traders. So far, the only one person named was the result of a courtroom outburst of assistant U.S. attorney Kenneth Breen, who recently accused Amr Ibrahim Elgindy, an Egyptian-born stockbroker on trial in San Diego, with knowing in advance about 9-11 and capitalizing on the insider information by attempting to unload $300,000 worth of shares on Sept. 10, 2001. (6)

In court Breen charged that on the afternoon of Sept. 10, Elgindy contacted his broker at Salomon Smith Barney and asked him to sell the stock, confiding in the broker that the Dow Jones industrial average, which at the time stood at about 9,600, would soon dive to below 3,000. (7)

The destruction of 7 World Trade Center was officially oil tanks including two 6,000-gallon storage tanks owned by Salomon Smith Barney, and conduits beneath the building may have contained asbestos and feeder lines wrapped in a material containing toxins. (8)

Biased research

A major scandal was the accusation that Citigroup and other investment banks had struck secret deals with companies that said that the bank's stock research division would rate that company a "Buy" if it would do investment banking with that division. Implicated by that scandal was analyst Jack Grubman. This scandal led to some wondering if the financial services conglomerate concept would lead to conflicts of interest such as this. Citigroup eventually paid the largest fine in the "global settlement" with the state, resulting from conflicts of interest between research and investment banking at Salomon Smith Barney. (9)

Citigroup decides to make Jack Grubman the fall guy (10) and renamed the company to Smith Barney. (11)

Example: Global Crossing
Global Crossing was brought public in 1998 by Smith Barney. The company, which aimed to lay global fiber-optic telecom cables, received frequent advising from Grubman. He advised Global Crossing on its purchase of Frontier Communications, its attempted takeover of US West, and its choice of Robert Annunziata as CEO. Grubman continued to publish ratings on Global Crossing stock, even though he was personally involved in the company. He has faced intense criticism and even lawsuits because he gave the company “buy” ratings, apparently out of a conflict of interest, through nearly the entire length of the its collapse. These “buy” ratings weren’t dropped until October of 2001. Shares were valued at one dollar by this time. Global Crossing declared bankruptcy in January of 2002. (12)

Frontline also speaks with two former Salomon Smith Barney brokers, who describe in detail how their firm steered choice initial public offerings (IPOs) to telecom CEOs like WorldCom’s Ebbers far more frequently that was reported to Congress. By offering large blocks of IPO stock at the typically low, opening-day price – even after the actual price had doubled, tripled, or quadrupled in trading – these brokers say Salomon was essentially giving millions of dollars in “free money” to CEOs in exchange for their investment banking business. (13)

And they did similar work for Enron, Level 3 Communication, Inc., WorldCom, XO Communications Group and many more. Luckily most of the evidence got destroyed when Seven World Trade Center was pulled by Larry Silverstein.

More details at:

http://www.uow.edu.au/arts/sts/bmartin/dissent/document...

http://www.the-catbird-seat.net/CITIGROUP.htm

http://www.the-catbird-seat.net/GlobalCrossing.htm

Sanford Weill
Sandy Weill (born March 16, 1933) is a banker, financier, formerly CEO and chairman of Citigroup. He served in those positions until October 1, 2003 and April 18, 2006 respectively. He is one of the richest men in the world.

Sandford started working for Bear Stearns. In 1982 he sold his company to American Express and served as CEO of Fireman's Fund Insurance in 1984. He tried to become CEO of Bank of America. In 1992 he bought a 27 percent share Travelers Insurance and reacquired his old Shearson brokerage in 1993 and by the end of the year he managed to take over the entire Travelers Corp. Sandford then merged it with Citicorp and in 2001 he became Class A Director of the Federal Reserve Bank of New York, however he had to resign in 2002 because of some scandals. (14)

He also runs around in a tight circle with all the names of the OP. Isn't that funny WTC 7 was build by the guy who knew, owned or worked with most of the inside traders.

Sources:
1. http://www.nybookdistributors.com/wall_street/feature/s...
2. http://www.citigroup.com/citigroup/corporate/history/sm...
3. http://www.ifar.org/911_citi1.htm
4. http://www.sourcewatch.org/index.php?title=Bill_Richard...
5. http://www.sourcewatch.org/index.php?title=Donald_H._Ru...
6. http://www.newsmax.com/archives/articles/2002/6/2/62018...
7. http://www.newsmax.com/archives/articles/2002/6/2/62018...
8. http://abclocal.go.com/wabc/news/WABC_060602_oil.html
9. http://en.wikipedia.org/wiki/Salomon_Smith_Barney
10. http://www.forbes.com/2002/07/22/0722grubman.html
11. http://en.wikipedia.org/wiki/Salomon_Smith_Barney
12. http://www.securitiesfraudfyi.com/salomon_smith_barney....
13. The Wall Street Fix, PBS Frontline, May 8, 2003, http://www.the-catbird-seat.net/CITIGROUP.htm
14. http://en.wikipedia.org/wiki/Sandy_Weill