During the time that he was trying to gain admission for the twins, he had also been asked by his boss, Sanford I. Weill, to take a "fresh look" at his longheld negative view of AT&T. And now an e-mail to Weill that was leaked to The Wall Street Journal seems to link the two events.
Titled "AT&T and the 92nd Street Y," Grubman's e-mail first makes clear he is re-evaluating AT&T and then proceeds to ask his boss, Weill, to help get his twins into the Y nursery school. Grubman wrote getting his children into nursery school "comes down to 'who you know.'"
However it happened, the school ultimately did accept the Grubman twins. His children can be seen each morning arriving at the Y with their nanny and chauffeur. They were accepted in the months after Grubman upgraded his recommendation on AT&T from "neutral" to "buy."
Weill, who declined to speak with 20/20, says he asked Grubman to take what he calls a fresh look at the AT&T stock — but it was not connected to helping get Grubman's twins into the Y. Weill says it is nonsense to think he pressured Grubman to do anything unethical.
But Weill put on a full court press at the 92nd Street Y to get Grubman's children into nursery school.
Not only did he make calls to his friends on the Y's board of directors, but he had Citigroup donate $1 million to the Y. The 92nd Street Y says it evaluates all children for nursery school on the same basis and that money — even a $1 million donation — has no influence.
Grubman declined to talk with 20/20 but has said his rating on the AT&T stock was based on merit and had nothing to do with the help he received in getting his children into nursery school.
But if the allegations against Grubman are true, he may have committed a serious fraud against AT&T investors, according to Arthur Levitt, the former chairman of the Securities and Exchange Commission and a critic of corporate America.
"You could argue that millions of dollars have been lost by individuals by stock recommended by an analyst that didn't really believe the report he was creating," Levitt said.
Levitt, whose own children went to New York City private schools, said buying entry into these schools has gone on in the elite community for as long as he can remember. "Some of them tell you how much you have to put up, some of it's done by winks and nods," according to Levitt.
Stillman, the mother of a 3-year-old, did not know Sandy Weill and did not have a million dollars to donate. She was unable to get her son into the Y, and says she now feels glad that he isn't in school there. "I would rather have him be in an environment where people value things other than status and money because those aren't the values I want Cody to be brought up with," she said.