Prudential maverick bank analyst Michael Mayo tackled troubled financial giant Citigroup by slapping a “sell” on the nation’s largest bank yesterday, dragging the stock down more than 10 percent.
Citigroup, run by savvy Wall Streeter Sandy Weill, lost $3.36, or 10.3 percent, to end at $29.39.
The only “sell” rating on the international banking conglomerate came with additional bad news for the embattled bank.
New York Attorney General Eliot Spitzer reportedly has ratcheted up his investigation into Citigroup’s practices in initial public offerings and into the conduct of telecom analyst Jack Grubman to include Grubman’s superiors.
Michael Carpenter, head of Citigroup’s Salomon Smith Barney investment bank, and two other senior Citigroup executives are also being probed by Spitzer.
“We are following the evidence wherever it leads,” said Spitzer spokeswoman Juanita Scarlett. But she declined to confirm or deny elements of the investigation.
Citigroup’s IPO practices have been under intense scrutiny by regulators, prosecutors and lawmakers. The probes led to the resignation Grubman last month.
Citigroup’s stock is down more than 37 percent for the year.
Mayo, ranked an all-star bank analyst by Institutional Investor magazine, cited lawsuits relating to Enron, $11 billion in Latin American debt exposure, corporate governance issues and consumer loan losses in a report yesterday.