“As shares of WorldCom were falling on rumbles of a pending financial crisis a year ago, the company’s founder, Bernard J. Ebbers, took to the microphone in a conference call with Wall Street analysts and swatted down rumors about the company’s problems,” writes Gretchen Morgenson in today’s New York Times.

“According to an e-mail message uncovered by securities regulators in their investigation of Wall Street research practices, Mr. Ebbers received a good deal of help with his rousing script from Jack B. Grubman, the telecommunications stock analyst at Salomon Smith Barney.”

“Stock analysts are supposed to offer investors independent, fair-minded opinions on the health of American companies. But this exchange reveals an unusual level of collaboration between analyst and executive and suggests that Mr. Grubman was anything but impartial about WorldCom.”

“It has long been known that Mr. Ebbers and Mr. Grubman were unusually close. Mr. Ebbers relied heavily on the analyst and his firm for financing, merger advice and a strategic view on the telecommunications industry.”

“A comparison of the e-mail message’s contents, which were obtained from two people briefed on the investigations, with a recording of the WorldCom conference call suggests that Mr. Ebbers relied heavily on Mr. Grubman’s advice on that February day. On the call, scheduled to discuss fourth-quarter earnings, Mr. Ebbers walked through the analyst’s suggestions on subjects like WorldCom’s accounting and its liquidity almost exactly as Mr. Grubman had advised.”

“There is nothing illegal about an analyst advising a chief executive how to approach a crucial conference call. But providing such detailed coaching to an executive, as the e-mail message does, is highly unusual for an analyst and seems to indicate that Mr. Grubman considered himself a close adviser to Mr. Ebbers, playing a supporting role to the chief executive that would normally be the task of a corporate insider or public relations specialist.”

” ‘It looks as if Jack was calling all the shots,’ said Susan Kalla, a telecommunications stock analyst at Friedman, Billings, Ramsey in New York, after having been told about the e-mail message. ‘The tone of it is a complete reversal of what you would normally see, where the C.E.O. tells the analyst how he conducts the business. The analyst would never be in the position to have the superior knowledge base, ostensibly.’ “