Frank Quattrone, one of the highest flying investment bankers on Wall Street during the dotcom boom, came crashing to earth on Monday when he was found guilty of obstruction of justice.
The verdict was reached after seven hours of jury deliberations. Quattrone (48), who ran the technology division of Credit Suisse First Boston, could face up to 25 years in prison but is likely to receive a sentence of up to two years. Sentencing is set for September 8.
He was found guilty on three charges: obstruction of justice, witness tampering and obstruction of agency proceedings. The trial was the United States government’s second tilt at Quattrone after the first trial ended in a hung jury in October last year.
Quattrone’s lawyer said his client would appeal against the verdict and maintained he was innocent. Quattrone is the most prominent former banker to be prosecuted so far for the reckless behaviour that characterised the tech stock boom.
The banker earned $120-million in 2000, the peak year of the bubble. He presided over the stock market debuts of companies that became household names, including Amazon and Netscape.
He also holds a stake in the soon-to- be floated search engine Google.
Rarely seen without a grin on his face, he was once in such demand that he employed his own press team.
The banker was accused of interfering with a government investigation into the allocation of shares in hotly demanded stock market flotations in late 2000.
The charges hinged on an e-mail sent by Quattrone on December 5 2000, in which he instructed colleagues to ”clean up those files”. A lawyer for Credit Suisse, David Brodsky, had notified Quattrone of an investigation into the allocation of shares two days earlier.
Closing arguments had focused closely on the incriminating e-mail.
David Anders, an assistant US attorney, had asked: ”What was Frank Quattrone thinking? He knew about the ongoing investigation, and he told his employees to destroy documents anyway. He did it to obstruct justice and he did it to protect his lucrative business and livelihood.”
Quattrone insisted he was simply adhering to routine company policy on document retention and destruction.
He contended, as he did during the first trial, that he believed the investigations involved a different part of Credit Suisse and so never thought he was interfering by telling staff to destroy old records.
His lawyer told the jury: ”This case is about this itty-bitty e-mail and whether it amounts to three crimes.
”This is not a man who intended to obstruct justice. The government is asking you to connect a lot of dots that weren’t connected in Frank Quattrone’s mind.”
The conviction marks a second significant victory for the government’s attempt to clean up corporate America following the successful prosecution of businesswoman and ”domestic goddess” Martha Stewart.
Credit Suisse paid $100-million in late 2001 to settle allegations that it had taken kickbacks, charging inflated commissions to some clients in exchange for access to shares in initial public offerings (IPOs).
During the dotcom boom, IPOs commonly showed huge first-day gains, allowing holders of the shares to turn a quick profit.
Quattrone was fired from Credit Suisse in March last year after refusing to appear at a hearing of the National Association of Securities Dealers.
The trial did little to enhance Wall Street’s reputation in the outside world. Numerous e-mails were brought in evidence referring to clients as ”pigs” and ”oxygen pirates”. — Â