Friday, Aug. 16, 2002 | 11:11 a.m.
NEW YORK -- Jack Grubman, the star telecommunications analyst at Citigroup Inc., resigned under pressure amid allegations he misled investors by issuing favorable stock ratings to win investment banking work.
Grubman is leaving by "mutual agreement," the company said. He will receive $32.2 million in severance to leave 13 months before his contract ends, according to people familiar with the matter. He is under scrutiny by Congress for the role he played in allocating initial public offering shares to executives of WorldCom Inc., which filed for bankruptcy after it misreported $7.18 billion in expenses.
The decision to force out Grubman -- who earned about $20 million a year -- is an effort by Citigroup Chairman Sanford Weill and his Salomon Smith Barney unit to distance the firm from the growing threat posed by more than two-dozen investor lawsuits and a congressional investigation. Weill declined to comment.
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