Regulatory Matters - Update
November 13, 2002
From: Sandy Weill
Today, we learned that a number of false and inflammatory emails that we provided to regulators have become public. The regulators have already received unequivocal sworn testimony from the author of the emails that they are “fabrications” with “zero basis” in reality. Recognizing the defamatory nature of these emails, we asked the regulators to maintain their confidentiality and to conduct an accelerated investigation in order to verify their falsity. Regrettably, the emails have reached the newspapers in spite of their lack of factual basis. Many of us share a deep outrage at this.
These emails wrongly assert a connection between Mr. Grubman’s decision to raise his rating on AT&T stock and Michael Armstrong’s vote on our Board in connection with the departure of John Reed as Co-Chief Executive Officer.
There was absolutely no connection between these events. I have said before, and will say again: I never told any analyst what he or she had to write – and I never would. Nor would I ever attempt to manipulate a Board member’s vote. Any suggestion that I did is just wrong. Mr. Armstrong has categorically denied that his Board vote was in any way connected to the upgrade. Mr. Grubman has testified under oath that his statements linking these separate events were his own invention made to inflate his importance.
I did suggest to Jack Grubman that he take a fresh look at AT&T in light of the dramatic transformation of the company and the industry. I always believed that Mr. Grubman would conduct his own research and reach independent conclusions that were entirely his own.
Most of the issues that have been raised to date by regulators and others over the course of the past several months are prompting necessary change. Indeed, they have resulted in the entire industry taking a hard look at some of the ways we have done business, and as we have said before, we intend to be a leader in raising standards in the industry.
I hope that this information helps you put this particular matter into context.
