Wednesday, March 16, 2016
Former Presidential Speechwriter Bill McGurn Guest Lectures in MSBA Class
Last week's case study dealt with the ethical question surrounding the relationship between Citigroup CEO Sandy Weill and Salomon Smith Barney analyst Jack Grubman in 2001. Was the sudden AT&T upgrade from hold to strong buy a result of new strategic information that Grubman encountered? Or was it in fact a quid pro quo for Weill's recommendation and $1M contribution to the 92nd Street Y pre-school which Grubman wanted his childrento attend?
At stake was AT&T's choice of an investment bank, which Weill coveted, knowing a hold recommendation from his subsidiary SSB was likely to hurt Citi's chances. After discussing the case and reading memos between the two, Mr. McGurn and professor Max Torres role-played Jack Grubman and congressional questioners. Guilty or not guilty? We will never know. What we do know is the case led to a spirited debate in our Spirit of Enterprise class and demonstrated the fine line between honorable and selfish intentions.