Former Tech Investment Banker Indicted
A federal grand jury on Monday indicted former Silicon Valley investment banking star Frank Quattrone on charges of obstruction of justice in connection with government probes into abuses in initial public offerings of hot technology stocks during the dot-com market boom.
The 27-page, three-count indictment handed up in U.S. District Court in Manhattan repeats charges made in an April 23 criminal complaint. The complaint accused Quattrone, former head of Credit Suisse First Boston’s Silicon Valley-based Global Technology Group, of urging employees to destroy documents subpoenaed by federal authorities in their investigation.
Quattrone, 47, of Menlo Park, is the first Wall Street figure to face criminal charges in the scandals that have erupted since the tech bubble burst three years ago.
The indictment says that on Dec. 4, 2000, a day after learning that a federal grand jury had issued subpoenas seeking documents and testimony from CSFB, Quattrone authorized a colleague to send an e-mail to members of the technology group instructing them to “catch up on file cleaning” by destroying documents related to the IPOs.
A day later, Quattrone personally followed up with an e-mail reminder, the indictment states. CSFB employees heeded the memos by destroying “hard copy and electronic documents relating to the IPOs,” including material specifically sought by the grand jury and investigators in a related probe by the Securities and Exchange Commission, according to the indictment.
CSFB suspended Quattrone in February after the e-mails became public, and he resigned under pressure the following month.
Quattrone “is charged with a crime that he did not commit,” his lawyer, John W. Keker, said in a statement Monday. “We will request a speedy trial, and we are confident the jury verdict will establish Frank’s innocence and reaffirm his honesty and integrity,” Keker added.
No date has yet been set for Quattrone’s arraignment, officials said.
If convicted, Quattrone faces 10 years in prison on each of two of the counts, five years on the third, plus fines of as much as $250,000 on each count, according to the prosecutor, James B. Comey, U.S. attorney for the Southern District of New York. Quattrone remains free on his own recognizance.
The civil probe by the SEC and broker-dealer regulator NASD, formerly the National Assn. of Securities Dealers, ended in a January 2000 settlement, with CSFB paying a $100-million fine but not admitting or denying wrongdoing. The probe centered on how CSFB doled out shares in hot IPOs to its customers.
