'The Wall Street Journal' Meredith Whitneys Meredith Whitney

Things are looking pretty grim for Meredith Whitney Advisory Group. Except possibly from Bermuda.

Ms. Whitney won acclaim in 2007 with a prescient warning that Citigroup Inc. would come under pressure—a call that gained widespread recognition and catapulted her to the upper ranks of Wall Street analysts. Using that renown, she opened a research firm called Meredith Whitney Advisory Group in early 2009 and later spoke of expanding it….

The firm started with more than 30 research clients, but just 14 of the clients were left at the end of January, according to people familiar with the matter. Elliott Management, Paulson & Co. and Balyasny Asset Management are among those that have departed, according to people close to Ms. Whitney's firm and to those hedge funds. The firm still counted AllianceBernstein LP, BlackRock Inc. and Guggenheim Partners LLC as clients as of the end of January, the latest period for which information was available.

The firm's staff has shrunk in the past two years from five full-time investment professionals, in addition to Ms. Whitney, to just one as of last month, according to people close to the firm. Meredith Whitney Advisory Group has published just three corporate-research pieces since the beginning of May and no corporate reports since May 23, according to the firm's website. It says the firm covers 15 financial-services firms but the last time a research report was published that focused on J.P. Morgan Chase & Co., for example, was Oct. 12 of last year….

Those who have worked for Ms. Whitney say she continues to have an impressive Rolodex and has close relationships with executives in the financial community and investors. In meetings and when she is engaged in research, she continues to do a good job evaluating broad moves in financial shares, they say.

Yet four former employees at the firm say they became frustrated with Ms. Whitney's work habits. She often works from Bermuda during long weekends on the island, these people say. In the past, Ms. Whitney has said she commutes on weekends from John F. Kennedy airport in New York to Bermuda's exclusive Mid Ocean Club. A representative of the resort says she owns a home on the resort's property.

Clients Come, Go at Research House [WSJ]