NEW YORK (CNN/Money) - Salomon Smith Barney brokers allegedly doled out shares of hot IPOs into personal accounts of CEOs whose investment banking business the firm was trying to win, charges the Citigroup unit denies.

According to a lawsuit filed by a former Salomon broker, top executives at telecommunications companies, such as WorldCom ex-CEO Bernard Ebbers, regularly received large allotments of hot initial public offerings in exchange for investment banking business.

David Chacon, who filed the complaint in Los Angeles Superior Court last year, says he helped allocate the shares, according to press reports Thursday. The broker claims he was wrongfully terminated after he complained to management about the practice, the New York Times said.

Salomon denied the allegations, saying Chacon was fired for violating corporate policies. "We've examined his claims and believe they are completely without merit," a Salomon spokeswoman said. "The timing of his amended complaint is highly suspect and contains gross factual inaccuracies."

In the lawsuit, Chacon charges that Salomon took part in a process known as "spinning" in which the firm would allot chunks of hot IPO shares to a group of wealthy individuals while designating far fewer or none at all to other clients. Ebbers was said to be one of at least five executives who benefited from the practice.

Ebbers reportedly was allowed to buy several hundred thousand shares of Rhythms Netconnections, which went public in April 1999 by selling 9.4 million shares at $21 each through lead underwriters Merrill Lynch and Salomon.

Ebbers was at virtually no risk because he was not informed the shares were set aside for him until they had risen to $90, at which point he took the shares at the initial price and later sold them, making a $16 million profit, the Wall Street Journal said.

The Salomon spokeswoman declined to comment on specific share allocation. However, corporate executives who have personal accounts at Salomon can seek IPO investments through their own personal financial consultant. The consultant would request share allotments through Salomon's private client management unit. The firm's syndicate desk, which handles IPOs, would work with the sales and the private management units to allocate the shares, the spokeswoman said.

Other telecom executives named in Chacon's lawsuit for allegedly benefiting from the practice include Joseph Nacchio, the ousted chairman of Qwest Communications International Inc.; James Crowe, chairman of Level 3 Communications Inc.; Stephen Garofalo, chairman and former CEO of MetroMedia International Group Inc.; and, Clark McLeod, former chairman of Level 3, the Journal reported.

According to Chacon's lawsuit, the Salomon broker designated to handle the executives' accounts was Rick Olson, who is a director of private wealth management. Olson handled wealthy clients at Salomon Inc. before it merged with Smith Barney and aligned himself with the investment banking department and coordinated constantly with Salomon analyst Jack Grubman, becoming known at the firm as "Jack's broker," the New York Times said.

Congressional investigators probing WorldCom's $3.8 billion accounting scandal questioned Grubman about stock allocations and have asked the firm to supply additional information, which Salomon declined to produce because of confidentiality constraints, the Times said. Grubman said in congressional testimony last week that he could not recall if shares in hot IPOs had gone to top WorldCom executives.

Grubman is also under investigation by New York Attorney General Eliot Spitzer for his alleged dual role as researcher while also helping the investment bankers pitch new business, possibly misleading investors who purchased stock based on his recommendations. Salomon also is being investigated for allegedly encouraging such practices with the promise of compensation for assisting with winning new business.

Curiously, Chacon now works at Credit Suisse First Boston, a CSFB spokeswoman confirmed to CNN/Money. CSFB, the investment banking unit of Credit Suisse Group, has had its own infractions with regulators due to alleged stock offering abuses.

In January, CSFB agreed to pay $100 million for allegedly giving favored investors larger shares of hot IPO stocks during the heady tech boom of the late 1990s and early 2000. In exchange, these clients allegedly kicked back part of their quick profits on IPOs to CSFB, in the form of inflated commissions on other stock trades.