In recent months, he has been at the centre of speculation surrounding analyst recommendations for companies such as WorldCom and Global Crossing.

Mr Grubman continued to recommend that investors buy shares in these companies, even as it was becoming clear that the boom in the telecoms sector was over.

He is now under investigation for recommending that investors buy shares in companies that were also paying Salomon Smith Barney huge fees for investment banking services.

Mr Grubman has now been targeted by at least 40 consumer complaints and lawsuits.

Many of these were related to the WorldCom collapse.

Regrets...

"While I regret that I, like many others, failed to predict the collapse of the telecommunications sector and I understand the disappointment and anger felt by investors as result of that collapse, I am nevertheless proud of the work I and the analysts who worked with me, did, " he wrote in a letter to Michael Carpenter, Salomon's chief executive.

He added that the barrage of negative media reports were now undermining his work.

"I did my work my work as an industry analyst within a widely understood framework consistent with industry practice that is now being extensively second-guessed," he said.

Mr Carpenter has defended his high-profile analyst's work.

"We believe that... he always wrote what he believed and conducted himself professionally and in accordance with legal and ethical standards," he said.