Subject: [NEXTEL-1] Former Smith Barney analyst reaches settlement over Winstar research

From: Marcelrf <[email-masked]>
Date: Tue, 06 Apr 2004 12:32:18 -0400

Former Smith Barney analyst reaches settlement over Winstar research
By Emily Motsay
April 06 12:25:00, 2004

Financial regulatory services provider NASD announced Christine
Gochuico, former vice president and telecommunications
research analyst for Salomon Smith Barney Inc., has settled charges
related to misleading research of broadband services provider Winstar
Communications Inc.

Gochuico will pay a $100,000 fine and be suspended from associating with
any NASD-member companies for six months.  For an additional 18 months,
Gochuico is prohibited from allowing her name to appear on or be
associated with any NASD-member company’s research report, advertisement
or sales literature.

The complaints against Gochuico alleged that between January and April
2001 she assisted Jack Grubman, managing director of SSB’s equity
research department, in drafting research reports containing misleading
statements and omissions and including an unreasonable price target for
the company.

Gochuico was also charged with publishing reports in favor of Winstar
while privately expressing doubts and discussing risks, as evidenced in
company e-mails and other documents. In addition, she was charged with
violating NASD rules that require conduct to be consistent with “just
and equitable principles of trade and high standards of commercial honor
and NASD’s advertising rule that prohibits misleading statements and
exaggerated and unwarranted statements.”

From January to April 2001, SSB’s reports repeatedly recommended
purchasing Winstar stock and assigned it a “Buy” rating and a target
price of $50 per share. Meanwhile, the stock fell more than 99 percent,
from $20 per share to 14 cents per share, leading Winstar to file
bankruptcy in April 2001.

From February 1999 through July 2001, SSB had an investment-banking
relationship with Winstar under which it served as lead manager, joint
manager or advisor on 10 Winstar equity, bond and financing transactions
valued at more than $5.6 billion. SSB received $24 million for its
services.

Grubman and SSB previously settled the case against them.

http://rcrnews.com/cgi-bin/news.pl?newsId=17589

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