Instead, National Financial Partners, a financial services firm run by Weill's daughter Jessica Bibliowicz, 43, will use Goldman Sachs Group Inc. (NYSE:GS - News) and other underwriters when it sells stock to the public next year, a source close the matter said. National Financial declined to comment.

"Sandy and Jessica agreed together that it was appropriate to use other bankers," a Citigroup spokeswoman said on Friday.

Although investment banking business is scarce these days, Citigroup's Salomon Smith Barney securities arm backed away amid an investigation into alleged stock research abuses at the firm. Citigroup also is being probed for allegedly doling out shares in hot new stock offerings to big corporate clients to win investment banking deals in the late 1990s Internet boom.

The Wall Street Journal first reported the story.

New York Attorney General Eliot Spitzer is looking at whether Weill pressured former Salomon Smith Barney star telecommunications analyst Jack Grubman into raising his rating on AT&T Corp. (NYSE:T - News) to win the deal to underwrite a lucrative public offering of the company's wireless unit.

Weill has said he told Grubman to reexamine his rating on AT&T, but denied he requested Grubman upgrade the stock to win banking business or support from the financial services company's board of directors.