Citigroup Global Markets (Smith Barney) Liable Twice for Exercise and Hold Award and Jack Grubman's Manipulation of WorldCom Value

Recently a NASD arbitration panel in Chicago, IL ordered Citigroup to pay $325,000 in compensatory damages, $97,500 in attorneys' fees and $29,863.64 in costs. An expert testified that the exercise and hold strategy for handling non-qualified stock options is almost always unsuitable, that Jack Grubman manipulated his valuation methodologies to double his valuation on WorldCom in the face a deteriorating fundamentals at WorldCom and that the investors suffered $325,000 in market adjusted losses.

Similarly, recently a NASD arbitration panel in Tampa, FL ordered Citigroup to pay $462,500 in compensatory damages, plus at least $74,000 in prejudgment interest. An expert testified that Jack Grubman manipulated his valuation methodologies to double his valuation on WorldCom in the face a deteriorating fundamentals at WorldCom.

Source: FinancialCounsel.com