Jack Benjamin Grubman is an American former managing director of

Salomon Smith Barney Salomon Brothers, Inc., was an American multinational bulge bracket investment bank headquartered in New York. It was one of the five largest investment banking enterprises in the United States and the most profitable firm on Wall Street durin ...

and the lead

research analyst A financial analyst is a professional, undertaking financial analysis for external or internal clients as a core feature of the job. The role may specifically be titled securities analyst, research analyst, equity analyst, investment analyst, o ...

for the telecommunications sector.

Personal life

He was born in

Northeast Philadelphia Northeast Philadelphia, nicknamed Northeast Philly, the Northeast and the Great Northeast, is a section of Philadelphia, Pennsylvania. According to the 2000 census, Northeast Philadelphia has a population of between 300,000 and 450,000, depending ...

, Pennsylvania, to Isador and Mildred Grubman. His father worked for the City of Philadelphia Sanitation Department, while his mother worked at a home as dressmaker. He holds a bachelor's degree in mathematics (

cum laude Latin honors are a system of Latin phrases used in some colleges and universities to indicate the level of distinction with which an academic degree has been earned. The system is primarily used in the United States. It is also used in some Sou ...

) from

Boston University Boston University (BU) is a private research university in Boston, Massachusetts. The university is nonsectarian, but has a historical affiliation with the United Methodist Church. It was founded in 1839 by Methodists with its original campu ...

and a master's degree in probability theory from Columbia.

Career

In 1977, he started work at

AT&T AT&T Inc. is an American multinational telecommunications holding company headquartered at Whitacre Tower in Downtown Dallas, Texas. It is the world's largest telecommunications company by revenue and the third largest provider of mobile tel ...

. In 1985, he moved to PaineWebber. By 1994, he was making a million dollars a year and moved to

Salomon Brothers Salomon Brothers, Inc., was an American multinational bulge bracket investment bank headquartered in New York. It was one of the five largest investment banking enterprises in the United States and the most profitable firm on Wall Street duri ...

. During this period, he was the most important analyst of the telecommunications industry during a time of great upward activity in the sector. In 1998 when Salomon Brothers became Salomon Smith Barney, he was the managing director and became Head of Global Telecommunications Research. As a result, Grubman became the highest paid analyst on Wall Street; earning $25 million per year from 1998 through 2002. The sector reached a peak by 2001, however Grubman still made public statements calling for investors to buy. In March 2001, he listed ten stocks in the sector to buy of which five were selling for less than a dollar per share a year later. It was his activities during these years that led him into legal problems. The commission found that from 1999 to 2001, Grubman had issued research reports and other documents that concealed material facts and which misled investors. In 1999, he upgraded his opinion of AT&T stock from "neutral" to "buy". In a 2001 e-mail, Grubman explained the change was part of a plan to get his children into the 92nd Street YM-YWHA's preschool program. Grubman was advising both telecoms firms such as

Global Crossing Global Crossing was a telecommunications company that provided computer networking services and operated a tier 1 carrier. It maintained a large backbone network and offered peering, virtual private networks, leased lines, audio and video confer ...

and investors at the same time. This was an obvious conflict of interest. In April, 2003, the

U.S. Securities and Exchange Commission The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...

banned Grubman from financial industry for life for misconduct. Grubman was also required to pay a $15 million fine. According to an article in ''

Forbes ''Forbes'' () is an American business magazine owned by Integrated Whale Media Investments and the Forbes family. Published eight times a year, it features articles on finance, industry, investing, and marketing topics. ''Forbes'' also re ...

'', Grubman had a net worth of about $75 to $100 million after paying the fine. In 2004, he was hired by Distinctive Devices as a consultant, a move that increased the stock price of the firm. In 2003, he formed Magee Group, LLC. A consulting firm that specializes in advising and/or strategic consulting in both telecommunications and technology companies. Especially focusing on those companies developing enabling applications/technologies in the IP, wireless, broadband and next generation network areas. As of August 2011, he was a managing partner at the Magee Group.

References

{{DEFAULTSORT:Grubman, Jack Year of birth missing (living people) Living people American businesspeople Boston University College of Arts and Sciences alumni Columbia University alumni