NEW YORK (CNN/Money) - The New York State Attorney General is widening his investigation into Salomon Smith Barney by looking into whether the investment bank's top brass were involved in possibly influencing stock recommendations by the firm's analysts in order to win investment banking business.

Concerns about such conflicts of interest recently helped force the resignation of Salomon's telecom analyst, Jack Grubman.

The probe is just the latest problem for the investment banking unit of Citigroup, whose executives have been called before Congress to answer questions about Enron, the energy trader that went bankrupt last year.

Shares of Citigroup (C: Research, Estimates) fell $3.36, or 10 percent, to $29.39 Tuesday, widening their year-to-date loss to 42 percent.

Eliot Spitzer, the New York attorney general, has been looking into whether Citigroup recommended stocks and doled out hot new stock offerings to win banking business from current and potential clients. The probe reportedly involves the work of Grubman, who resigned last month amid questions about the objectivity of his research into failed companies such as WorldCom.

On Tuesday, CNNfn confirmed the widening of that probe following a report on the matter in the Wall Street Journal.

Spitzer is now also investigating the role of Michael Carpenter, the head of Citigroup's Salomon unit, and Kevin McCaffrey, the head of its stock research department, in allegedly approving or directing overly optimistic research reports, as well as allocating potentially profitable initial public offerings to investment banking clients, a source familiar with the situation said Tuesday.

McCaffrey was Grubman's direct boss, according to sources, and Grubman has been claiming that everything he did was known to his bosses.

Spitzer's office is also looking at Eduardo Mestre, the head of Salomon's investment banking department, who worked closely with Grubman when he would help the firm win investment banking deals, the Journal reported.

A spokeswoman for the company told the newspaper that Spitzer's office has not interviewed Carpenter or Mestre, but declined to comment about McCaffrey.

The AG's office is also investigating the role Citigroup CEO Sanford Weill might have played in allegedly getting Grubman to upgrade his rating on AT&T (T: Research, Estimates) to land an investment banking deal.

The credibility of Wall Street research has taken a dive. Critics allege that analysts -- under pressure to bring in lucrative advising as well as merger and acquisition business for the investment banks who pay them -- cannot be objective about the companies they cover.

The awarding of IPOs during the dot.com bubble has also come up. Documents released this month by a congressional committee investigating Citigroup showed that former WorldCom CEO Bernard Ebbers pocketed more than $11 million in profits from sales of hot IPO shares "spun" to his Salomon account.

WordCom, a former Salomon client, filed for bankruptcy protection in July after revealing it hid $3.8 billion in expenses.

The widening Salomon probe wasn't the only problem for Citigroup; congressional investigators have charged the No. 1 financial services company with helping Enron manipulate its finances to deceive investors.

In addition, Prudential Securities Tuesday advised investors to unload shares of Citigroup stock, downgrading them to "sell" from "hold."