“Jack Grubman, the beleaguered telecommunications analyst who was once among the most powerful figures on Wall Street, resigned from Salomon Smith Barney yesterday by what the firm described as ‘mutual agreement’,” writes Gretchen Morgenson in today’s New York Times.

“During the bull market in technology shares, no one was more euphoric about the promise of upstart telecommunications companies than Mr. Grubman. And he remained upbeat on most of the companies he followed long after their fortunes had declined and even as they sank into bankruptcy.”

“An estimated $2 trillion has been lost by investors and lenders who put money into the telecommunications industry. Of the 25 largest bankruptcy filings in the United States, 10 have been made by telecommunications companies. Mr. Grubman recommended the stocks of all of them.”

“Mr. Grubman and his firm fared much better. Acting not only as an analyst recommending stocks to investors but also as an adviser to telecommunications companies on strategy, Mr. Grubman helped his firm win almost $1 billion in fees during the late 1990’s. He earned an average of $20 million annually in recent years.”

“But with his dual roles he also came to personify the conflicts of interest at brokerage firms that have done significant damage to investor confidence in recent months.”

“In the letter of resignation he submitted to the firm, Mr. Grubman said that his work as an analyst was now being extensively second-guessed and that the current criticism made it impossible for him to do his job. While he said he regretted that he had failed to predict the collapse of the telecommunications industry, he said, ‘I am nevertheless proud of the work I, and the analysts who worked with me, did.’ He added that he felt he had been unfairly singled out for criticism.”

“In a memo to Salomon employees, Michael A. Carpenter, the firm’s chairman, called Mr. Grubman a ‘valued member of our research team’ and said the analyst had always conducted himself professionally and in accordance with legal and ethical standards.”

“On leaving, Mr. Grubman will receive what remains of a lucrative five-year contract struck in 1998, according to a person who has seen the agreement. A $19 million loan will be forgiven and he will receive approximately $12 million of stock in Citigroup, which owns Salomon. By choosing to leave at a time when Citigroup’s shares are languishing — they are down 29 percent on the year — Mr. Grubman is walking away from a lot of money he could have had if he had stayed another year and the stock had recovered.”

“A spokesman for Citigroup said the firm would continue to pay Mr. Grubman’s legal bills.”