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 # FOR IMMEDIATE RELEASE
July 12, 2002
 
Sanford I. Weill and Michael A. Carpenter Submit Four Proposals to Regulators for Restoring Confidence in Research
 
Editor's note: The following letter was recently sent to the United States Securities and Exchange Commission, the New York Stock Exchange, and the National Association of Securities Dealers
 
July 12, 2002
 
Harvey L. Pitt
Chairman
United States Securities and Exchange Commission
450 Fifth Street NW
Washington, D.C. 20549
 
Richard Grasso
Chairman and Chief Executive Officer
New York Stock Exchange
11 Wall Street
New York, NY 10005
 
Robert R. Glauber
Chairman and Chief Executive Officer
National Association of Securities Dealers
One Liberty Plaza
New York, NY 10006
 
Dear Sirs:
 
Salomon Smith Barney and its parent company Citigroup are very concerned about the issues facing our industry involving the loss of confidence by investors in the integrity of equity research. We strongly support the actions taken to date by the self-regulatory organizations, in consultation with the industry, in attempting to restore this confidence. We believe the rules enacted by the SROs and approved by the Securities and Exchange Commission provide important regulatory standards for disclosure of conflicts of interest. Further, we were the first firm to voluntarily adopt the reforms promoted by NYS Attorney General Eliot Spitzer. Together, these reforms have strengthened the independence of the research function. Nonetheless, we believe that further steps need to be taken in order to more completely make research independent from investment banking and therefore bolster investor confidence.
 
We recognize that you are continuing to review these matters and develop proposals to address these serious issues facing our industry. In that light, we respectfully suggest that you consider adopting the following industry-wide proposals for equity research:
  1. Prohibit analysts from attending any meeting with investment bankers soliciting business from public companies;
     
  2. Prohibit analysts from participating in any “roadshow” presentation to investors;
     
  3. Prohibit investment bankers from having any input in determining the compensation of research analysts; and
     
  4. Prohibit investment bankers from previewing any research reports prior to publication.
We are happy to work with you and other industry leaders to develop these and any other possible ideas further. Thank you for your consideration.
 
Sincerely yours,
 
Sanford I. Weill
Michael A. Carpenter
 
 
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