The crackdown on conflicts of interest in Wall Street research has expanded to consider the role played by bank executives who supervised analysts.

Mr Kevin McCaffrey, the former head of US equities research at Citigroup's Salomon Smith Barney unit, is being investigated by the National Association of Securities Dealers (NASD).

Mr McCaffrey helped supervise Mr Jack Grubman, the former Salomon telecommunications analyst who has agreed to a $15 million (€14 million) fine and a ban from the securities industry for publishing overly bullish research to gain investment banking mandates.

At one point, Mr Grubman appeared to complain to Mr McCaffrey. The analyst wrote to his boss: "Most of our banking clients are going to zero and you know I wanted to downgrade them months ago but I got huge pushback from banking. I wonder of what use bankers are if all they can depend on to get business is analysts who recommend their banking clients."

The NASD, a self-regulatory organisation, told Mr McCaffrey that he was being investigated for violations including a failure to properly supervise.

Securities lawyers said the action raised the prospect that other heads of research could also face investigation in the future.

The NASD website said Mr McCaffrey had denied violating its rules.

Mr McCaffrey's name surfaced in a civil lawsuit filed last September by Mr Eliot Spitzer, the New York attorney-general, that offered a devastating portrait of the conflicts of interest at Salomon's equity research unit.

Mr McCaffrey is now global head of sales for Citigroup alternative investments.