Jack Grubman‘s 20-foot-wide townhouse at 12 East 81st Street is close to P.S. 6, the prestigious Upper East Side public school. That was convenient for the telecommunications executive’s twin girls, who walked to school less than a block away.
They didn’t always enjoy such a short commute, though. For preschool, they attended the 92nd Street Y.
In 1999, Mr. Grubman, then a high-powered analyst, bumped an AT&T stock from “neutral” to “buy,” thereby so appeasing AT&T CEO Michael Armstrong that he cast a vote on Citigroup’s board desired by chairman Sandy Weill. In return, Mr. Weill donated $1 million to the 92nd Street Y.
The smoking gun was a 2001 email to a friend: “You know everyone thinks I upgraded [AT&T] to get lead for [AT&T Wireless]. Nope. I used Sandy to get my kids in 92nd ST Y pre-school (which is harder than Harvard) and Sandy needed Armstrong’s vote on our board to nuke Reed in showdown. Once coast was clear for both of us (ie Sandy clear victor and my kids confirmed) I went back to my normal negative self on [AT&T]. Armstrong never knew that we both (Sandy and I) played him like a fiddle.”
The email sparked a Spitzer-led investigation that ended in Mr. Grubman’s lifelong ban from the securities industry and a $15 million fine, but no criminal charges resulted.
The Grubmans’ neo-Federal-style townhouse went on the market in 2008 for $32 million. Six months later, the price was cut to $28.5 million and hovered there until August of 2009, when it was taken off the market altogether.
Now, well-informed sources have confirmed that the townhouse, built in 1883, has finally gone to contract, despite not being officially listed, for $19.6 million. Mr. and Mrs. Grubman bought it in 1999 for $6.2 million in a reportedly all-cash transaction.
City records show that in 2002, mid-investigation, Mr. Grubman transferred the townhouse to his wife’s name. The sale proceeds are also in LuAnn Grubman‘s name alone. The obvious assumption is that the disgraced analyst needs money. But, according to a 2005 Fortune article, “Jack is Back,” Mr. Grubman’s net worth, after paying the fine, is at least $50 million, and the family owns a second home in East Hampton.
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