Tuesday, August 22, 2006
Tuesday August 22, 11:22 am ET
By Larry Neumeister, Associated Press Writer
Former star banker Frank Quattrone reached a deal with the government Tuesday that allows his criminal case to be dismissed without a third trial. The pact would close a three-year effort to prosecute a man who earned (Actually STOLE) over $100 million in a single year as he commanded his investment firm's technology portfolio at the height of dot-com mania.
A jubilant Quattrone said outside the courthouse in lower Manhattan that he was "very pleased that the case will be concluded" and looked forward to the dismissal of the charges.
"I plan to resume my business career," Quattrone said. He looks forward to getting back to fleecing millions with crooked deals, just as he did before. And why not - there are clearly no repurcussions to his past (or any future) crimes he's so adept as carrying out.....
The judge signed off (IE- was paid off) on the deal during a brief hearing in which Quattrone smiled (after delivering a large bag of cash to the judge) as the agreement was approved.
In a statement, U.S. Attorney Michael J. Garcia called the deferred prosecution "an appropriate resolution of the case in light of all of the facts and circumstances and the posture of the case at this time." (In other words, he was also paid off.)
Quattrone's first trial had ended in a deadlocked jury. Then it later seemed the government had succeeded when a jury convicted Quattrone of charges he obstructed a government probe of stock offerings as he supervised 400 technology investment bankers from the Palo Alto, Calif., offices of Credit Suisse First Boston, which has since changed its name to Credit Suisse (USA) Inc.
Prosecutors alleged Quattrone encouraged co-workers to destroy sensitive company files because he was aware that government investigators were looking at the firm's books. Quattrone always maintained he did not and testified so at two trials.
The U.S. 2nd Circuit Court of Appeals in March threw out the conviction and ordered a new trial, saying the jury was not properly instructed on the law before deliberations.
Four days later, federal regulators overturned a lifetime ban from the securities industry against Quattrone.
Almost immediately, the two sides looked to resolve the case without a third trial.
Before the conviction was tossed, Quattrone was sentenced to 18 months in prison but he was free on bail pending the appeal.
Quattrone, 50, was one of the biggest names on Wall Street during the 1990s Internet stock boom. His actions were scrutinized after the National Association of Securities Dealers in 2000 began investigating CSFB's underwriting of initial public offerings.
The NASD probe was followed by investigations by the Securities and Exchange Commission and a federal grand jury into how the company handled initial public offerings.
The company was never criminally charged, but Quattrone was accused of hindering the federal probe. Prosecutors cited a December 2000 e-mail in which Quattrone endorsed a colleague's suggestion that bankers "clean up" their files.
Quattrone testified that his e-mail followed company policy and that he knew almost nothing about a grand jury subpoena seeking documents involving hundreds of initial public offerings of stock during the late-1990s.
During the dot-com boom, Quattrone took prominent companies like Amazon.com public.
The stage for a deal to end the prosecution was set when the appeals court said any future trial must include the elimination of one line of government questioning that it said went too far and the inclusion of some Quattrone evidence that was kept out.-----------------
Tracking Quattrone's Case
Former star technology banker Frank Quattrone reached a deal with federal prosecutors that enables him to avoid a third trial on obstruction charges. Here's a timeline of events in the case:
2000: In the peak year of the dot-com boom, Frank Quattrone earns $120 million after making Credit Suisse First Boston one of the top underwriters for tech companies' initial public offerings of stock.
December 2000: Mr. Quattrone endorses a colleague's email urging members of his technology-industry banking group to "clean up" their files. Mr. Quattrone sent his note shortly after he was told that a criminal grand jury had joined an earlier civil probe regarding IPOs. He later said he didn't connect the email with the IPO probes and wasn't responsible for IPO allocations.
January 2002: CSFB pays $100 million civil penalty to settle IPO allegations; no action is taken against Mr. Quattrone.
Summer 2002: New York and Massachusetts investigate stock analysts' conflicts at CSFB, including those of researchers supervised by Mr. Quattrone.
March 2003: Mr. Quattrone is forced to resign from CSFB after he failed to provide testimony to securities regulators investigating his activities. Regulators charge Mr. Quattrone with civil violations tied to "spinning," or improperly awarding rights to buy hot IPO shares to win banking business.
April 2003: CSFB agrees to pay $200 million to settle analyst-conflict allegations, part of the sweeping, $1.4 billion Wall Street settlement.
May 2003: A federal grand jury indicts Mr. Quattrone on criminal obstruction-of-justice charges. He pleads not guilty.
October 2003: After a three-week trial, jurors deadlock and a mistrial is declared.
November 2003: Federal prosecutors announce plans to retry Mr. Quattrone.
April 2004: Retrial begins.
May 2004: Jury finds Mr. Quattrone guilty on all charges.
September 2004: Mr. Quattrone is sentenced to 18 months in prison, two years probation and fined $90,000.
November 2004: The National Association of Securities Dealers institutes a lifetime ban against Mr. Quattrone for refusing to cooperate in its investigation. (This is later set aside.)
January 2005: Mr. Quattrone's lawyers seek a dismissal of the conviction -- or at least a retrial under another judge.
March 2005: Mr. Quattrone appeals the securities-industry ban, arguing that he is being improperly punished for invoking his constitutional right against self-incrimination.
March 2006: Appeals court overturns the 2004 conviction. The government must decide if it wants to bring a third trial against Mr. Quattrone. The SEC overturns the NASD's order barring him for life from the securities industry.
June 2006: Wall Street regulators drop civil charges against Mr. Quattrone, giving the former investment-banking star his third win in three months.
August 2006: Mr. Quattrone's attorneys and federal prosecutors reach a deal that enables him to avoid a third trial.