Scandal Du Jour, Worldcom and Salomon Smith Barney

NY Times ^

[BlackJack]

Officers and directors of WorldCom received thousands of shares of hot initial public offerings from Salomon Smith Barney in the late 1990's, according to documents delivered late yesterday by the firm to a Congressional committee investigating the collapse of WorldCom.

The documents submitted by Salomon, which were delivered in response to a subpoena, also indicated that Jack B. Grubman, the firm's former star telecommunications analyst, was part of the allocation process when shares of initial offerings were doled out to WorldCom executives.

The House Financial Services Committee issued a subpoena to Salomon on Aug. 13 seeking details on the firm's allocation of shares in initial offerings to WorldCom executives and directors during the boom for technology stocks. Such stocks often rocketed in their first day of trading, generating enormous profits to those lucky enough to buy them when they were issued and sell them before they fell. The committee was also interested in the role Mr. Grubman played in the allocation process. In his testimony before the committee in July, Mr. Grubman said he could not recall whether WorldCom executives received shares in hot initial offerings.

[BlackJack]

"could not recall"? Sound familiar?

[fight_truth_decay]

"Officers and directors of WorldCom received thousands of shares of hot initial public offerings from Salomon Smith Barney in the late 1990's".. so did many "valued customers" with sizeable investment..thats how you get an IPO..with often stipulations it be held for a 30 day time period of which time the stock is not generally at its peak as there will be sell offs..should one sell before that time may risk receiving another IPO...as far as "not remembering" would be better to have remembered with the above arguement. The media leaves out details often!!

[fight_truth_decay]

correction:60 days..and the word "give to WorldComm" could mean gave with an investment on thier part..could be $10,000 ..this story is full of holes..not that I want these guys to get off..I want them in prison for a long time..effecting millions of people ..but these stories sound like the media is desperate for news!!

[okie01]

"...but these stories sound like the media is desperate for news!!"

The media, in general, and the New York Times, in particular, are indeed desperate for news. Any news, that is, which reflects poorly (or can be made to reflect poorly) on capitalism.

Being ignorant, they bite the hand that feeds them...

[Quilla]

I bought numerous IPO's through SSB in the late 1990's. I'd log on to a real time quote website and hit refresh over and over. Eventually, I'd catch it on the opening pop, call my broker, and sell instantly. Rarely did I hold one for over 10 minutes. Curiously, our local brokerage house would only receive 50-100 shares total for each IPO even though they would request 10,000 or more. The companies that had losses in the multi-millions performed the best. I never understood the premise.

[larryjohnson]

God for you. My SSB office which manages our IRAs managed to lose tens of thousands for us by buying Global Crossing when execs were selling and buying Worldcon plus others and selling at pennies.

[fight_truth_decay]

maybe that is why they had so few to offer..the quick in and out selling..the one I am with you have to have $100,000 in the account cash or equities..to take advantage of IPO's or be a Valued Customer with a brokerage house..they usually gave to those that channeled a good deal of money thru the brokerage house..hope you struck it rich on all of them..ah those were the days!!!

[fight_truth_decay]

plus the old addage.."buy on rumor sell on news"..when the news came out many sold..you can follow any on line stock discussion site to view rumors..go to a bar after work and hear a discussion...talk to managers of the stores you buy in..etc etc..How's business?.......guess that was all illegal too?

[Quilla]

As far as the market goes, I'm as poor as a church mouse (and dumb as a democrat). My father died in 1998 and I manage his accounts for my mother, hence the clout. I opened an account for myself in early 1999 with $2000 and it grew to $70K by December from IPO activity only - literally never owning anything over 10-15 minutes. Those days are gone forever. Now it's drawing a paltry interest rate waiting for my children to attend college.

I get so nervous watching the fluctuations in the stock market, I'm this || close from selling my mom's holdings and buying land.

[fight_truth_decay]

the "blue plate specials" I called them..this all had to happen eventually..and I blame alot of analysts and shows like CNBC..pumping stocks that had no real earnings (young stocks)also which they owned without disclosure and turnin thumbs down to good solid growth companies with real earnings and many customers..the warning signs were there way back..read the book "Trading With The Enemy" depicting Cramer(and he still shows his face on television with his own show) and his Hedge funds, shows exactly how they worked!!Greed pays a price eventually..(I didnt own GBLX nor Enron nor Worldcom)but still suffered $$$$$ from those Criminals as you didnt have to own them to be fully effected by them ...is time to move forward as more good companies out there then bad.. gotta do your own due dilligence.

[fight_truth_decay]

Dont watch every day!!..if the companies are strong,,,no debt money in the bank lots of customers..some retail isnt doing that badly..food stocks are doing ok... to me its buying time will be some new millionaires out there in 10 years.. the market has already had its Shock and some tremors will be felt for some time as you can see news that would have been a shock a few months ago are now only causing a small reaction to stock prices ..already figured into the price....and good luck.There are ups and downs in real estate too..but when real estate is down people dont go running out to sell it..do what you feel comfortable with..those days you speak of were to good to last on the shaky foundations they were built on..good luck.