UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

Securities Exchange Act of 1934
Release No. 48725 / October 31, 2003

Investment Advisers Act of 1940
Release No. 2189 / October 31, 2003

Administrative Proceedings
File No. 3-11323

I.

The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934 ("Exchange Act") and Section 203(f) of the Investment Advisers Act of 1940 ("Advisers Act") against Jack B. Grubman ("Respondent" or "Grubman").

II.

In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement (the "Offer") which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission, or to which the Commission is a party, and without admitting or denying the findings herein, except as to the Commission's jurisdiction over him and the subject matter of these proceedings, and the findings contained in Section III.A and III.B below, which are admitted, Respondent consents to the entry of this Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 and Section 203(f) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions ("Order"), as set forth below.

III.

On the basis of this Order and Respondent's Offer, the Commission finds that:

A. Respondent, during all relevant times hereto, was a registered representative associated with Salomon Smith Barney Inc. ("SSB"), currently known as Citigroup Global Markets Inc., a broker-dealer and investment adviser registered with the Commission.

B. On October 31, 2003, a final judgment was entered by consent against Grubman, permanently enjoining him from aiding and abetting future violations of Section 15(c) of the Exchange Act and Rule 15c1-2 thereunder, and from future violations of Rules 2110 and 2210 of the Conduct Rules of NASD Inc. and Rules 401, 472, and 476 of the New York Stock Exchange, Inc., in the civil action entitled Securities and Exchange Commission v. Jack B. Grubman, Civil Action Number 03 Civ. 2938 (WHP), in the United States District Court for the Southern District of New York.

C. The Commission's Complaint alleged, inter alia, that during 1999-2001 (the "relevant period"), Grubman was a Managing Director and research analyst at SSB, covering the telecommunications sector. The Complaint alleged that, during the relevant period, Grubman publicly issued certain research reports on two telecommunications companies that were fraudulent because they contained misstatements and omissions of material facts about the companies covered, contained recommendations that were contrary to his actual views and those of an analyst who reported to him, overlooked or minimized the risk of investing in these companies, and predicted substantial growth in the companies' revenues and earnings without a reasonable basis. The Complaint further alleged that Grubman issued certain research reports on six telecommunications companies that were not based on principles of fair dealing and good faith, did not provide a sound basis for evaluating facts regarding these companies' business prospects, contained exaggerated or unwarranted claims about these companies, and/or contained opinions for which there was no reasonable basis. The Complaint also alleged that Grubman issued a research report upgrading his rating on a telecommunications company that did not disclose that his objectivity had been compromised.

IV.

In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions specified in Grubman's Offer.

ACCORDINGLY, IT IS HEREBY ORDERED:

Pursuant to Section 15(b)(6) of the Exchange Act and Section 203(f) of the Advisers Act, that Grubman be, and hereby is, barred from association with any broker, dealer, or investment adviser.

By the Commission.

http://www.sec.gov/litigation/admin/34-48725.htm