Suspended CSFB Banker Criticizes Brokerage

Frank Quattrone, the Credit Suisse First Boston investment banker under criminal investigation, lashed out against his firm Monday and blamed the brokerage’s legal department for his troubles.

Through a spokesman, Quattrone went on the offensive and said CSFB’s legal department kept him in the dark about an investigation into his Silicon Valley-based banking team in December 2000.

He again dismissed allegations that he knew about such a probe when he sent an e-mail reminding staff to “clean up” files.

According to several sources familiar with the case, the NASD (formerly the National Assn. of Securities Dealers) is investigating Quattrone’s role in CSFB’s process of allocating shares in initial public stock offerings.

Recently, questions have arisen about whether Quattrone told members of his staff to destroy documents that regulators might have considered evidence in their probe of how the firm distributed hot technology shares that Quattrone and his group helped bring public during the dot-com craze of the late 1990s.

“The legal department at CSFB, which was managing the [internal] investigations and had responsibility for managing the document-retention policy, never made the connection between those investigations and the documents under the control of Frank’s bankers and never told Frank to suspend the policy,” Quattrone’s spokesman, Bob Chlopak, told Reuters.

“We believe and continue to believe that Frank is innocent,” Chlopak said. “He was following the document-retention policies that were in place and enforced by the legal department at CSFB at the time he sent his e-mail.”

The statements represent a change in tack by the 47-year-old Quattrone, who until now has maintained his innocence without faulting CSFB.

Quattrone was suspended by CSFB last month. Sources have said he is facing criminal investigations by New York Atty. Gen. Eliot Spitzer and the Manhattan U.S. attorney’s office.

Jeanmarie McFadden, a spokeswoman for the brokerage, declined to comment on Quattrone’s interpretation of the legal imbroglio. Earlier in the day, McFadden issued a statement saying CSFB “will take appropriate action” if Quattrone is shown not to be cooperating with regulators investigating him and the firm.

Late last week, according to another source familiar with the situation, Quattrone failed to appear before officials of NASD to give testimony. That could lead to CSFB’s dismissal of Quattrone, sources said.