THORNBURGH LOOKING DEEPER INTO WORLDCOM, SALOMON LINK (Grubman fallout)

NY POST ^ | May 12, 2003 | BEN SILVERMAN

[Liz]

The relationship between WorldCom and Salomon Smith Barney may have been deeper than Jack Grubman's friendship with Bernie Ebbers - and that has attracted the interest of former U.S. Attorney General Richard Thornburgh.

Thornburgh, heading a court-ordered investigation into the accounting scandal at WorldCom - which has since rebranded as MCI - has been looking into how Salomon Smith Barney handled the stock option accounts of WorldCom employees, The Post has learned.

[Liz]

Approximately 100 former and current WorldCom employees are now in arbitration with Salomon Smith Barney. The WorldCom employees have accused Salomon of pushing them to "exercise and hold" WorldCom shares based on former Salomon analyst Jack Grubman's reports.

If anyone could be dubbed a complete and total cultural zero, it's Grubman

[Liz]

The relationship between WorldCom and Salomon Smith Barney may have been deeper than Jack Grubman's friendship with Bernie Ebbers - and that has attracted the interest of former U.S. Attorney General Richard Thornburgh (who is)heading a court-ordered investigation into the accounting scandal at WorldCom - ....since rebranded as MCI ......looking into how SSB handled the stock option accounts of WorldCom employees......

Looking into stock option accounts, eh? Took 'em long enough.

[ken5050]

Lizzie..this is really surreal, even Orwellian..the lawsuit is about former WorldCom employees who were advised by SSB NOTto sell their stock after excercising their options...look, options grants expire after a certain time.so employees wil exercise the options ONLY if they're IN the money...and they need cash to buy in, and, depending on if they're ISO's or NQSO's..they need cash to pay the taxes....so do they sell some of the stock , or do they margin the stock to get the needed cash. Then,there's the further of issue of portfolio diversity..should they NOT have all their eggs in one basket, so to speak...it sounds smart, after the fact,but remember that their were tax consequences ( like 30% or more) of the gain..associated with selling..But in a nutshell, you have employees of WC, which was a huge financial fraud, suing SSB for NOT telling them to sell the stock, because the WC board was lying about the company's finances....Lewis Carroll would have enjoyed this..

[Liz]

Lewis Carroll would have enjoyed this....

So you're saying Spitzer speaks Jaberwocky? I can't wait to see the charges spelled out:

"Twas brillig, and the slithy toves
Did gyre and gimble in the wabe:
All mimsy were the borogoves,
And the mome raths outgrabe."