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Starwood Defends CEO on Charges Leveled in House IPO Report

WHITE PLAINS-Starwood Hotels and Resorts Worldwide issued a statement Monday that defended its chairman and CEO Barry Sternlicht from charges leveled against him by a Congressional Committee that he was given preferential access to IPOs managed by Goldman Sachs.

By John Jordan | Updated on October 07, 2002

WHITE PLAINS-In response to charges leveled against Barry Sternlicht, chief executive officer of Starwood Hotels & Resorts Worldwide Inc. that he received preferential access to IPOs managed by Goldman Sachs, the company issued a statement saying the deals were above board.

The House Financial Services Committee issued a report on Wednesday, Oct. 2, charging that Goldman Sachs offered IPOs to numerous corporate executives who were clients of the investment bank. Sternlicht was listed among a list of corporate executives who, the committee charged, were investment banking clients of Goldman Sachs that were given preferential access and received IPO shares. Contacted by Globest.com, a spokesperson for the House Financial Services Committee, refused to release specific allegations against Sternlicht. She said that Sternlicht, and a number of other executives, purchased at least 20 Goldman Sachs IPOs and/or received a single allocation of greater than 20,000 shares. The committee also stated that Credit Suisse First Boston and Citigroup/Salomon Smith Barney also allocated IPOs to some of its investment banking clients.

It should be noted that the report did not specify what, if any, profit Sternlicht made from those IPO purchases. Among the other executives named by the committee to have been investment banking clients of Goldman Sachs who received IPO shares were: former Enron executives Kenneth Lay, Robert Belfer and Herbert Winokur, Jr., William Clay Ford of Ford Motor Co., as well as several executives from WorldCom.

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