Citigroup may come to regret agreeing to pay future legal expenses of Jack Grubman, its former star telecoms analyst, in the US Congress investigation into WorldCom, as the bank has branded some of his emails "pure fantasy".

Grubman alleged in an email that Sandy Weill, chairman and chief executive officer of Citigroup, asked him to upgrade AT&T, the US telecoms firm, as part of Weill's effort to win support from Michael Armstrong, chairman and chief executive of AT&T, who was on the Citigroup board. Citigroup said the claims are "nonsense."