U.S. Plans Second Trial for Quattrone
Prosecutors in New York said Tuesday that they would retry Frank Quattrone, the former Silicon Valley investment banking luminary whose first trial on obstruction-of-justice and witness-tampering charges ended last month with a Manhattan federal jury deadlocked 8 to 3 for conviction.
In a two-paragraph letter faxed to U.S. District Judge Richard Owen, U.S. Atty. James B. Comey said prosecutors had talked with Quattrone’s defense team about the second trial, “and we will contact the court shortly regarding scheduling.”
Comey didn’t indicate whether the government would bring the same charges against the 48-year-old Quattrone. Prosecutors in Comey’s office couldn’t be reached late Tuesday.
It also isn’t clear whether the prosecution will change its legal strategy from its much-debated minimalist presentation of the first trial.
The prosecution contended that Quattrone’s forwarding of a single e-mail in December 2000 was proof he knowingly interfered with investigations into alleged misconduct at his employer at the time, Credit Suisse First Boston.
The investigations focused on CSFB’s handouts to clients of coveted new Internet stock offerings in the late ‘90s. The e-mail discussed the firm’s document-retention policies and urged Quattrone’s subordinates to “catch up on file cleanup.”
Quattrone’s attorney, John W. Keker, said he and his client “remain confident that the government’s evidence is insufficient to prove their case.”
“We are disappointed that Frank Quattrone will face another trial because he is innocent,” Keker said in a statement. Experts said that because of the heavy publicity and a desire not to put Quattrone in jeopardy sooner than necessary, the defense probably would not object to the government choosing to spend time reconstituting its case.
That, some legal experts suggested, is precisely what prosecutors must do.
“The government really blew this case by trying to streamline it to such an extent that it ended up carving a lot of the meat out, stripping the case to the bone and thus losing its sex appeal,” said Christopher J. Bebel, a former prosecutor now practicing securities law at Shepherd, Smith & Bebel in Houston.
He said the government needed to do more to suggest how CSFB, desperate to increase profit, created a virtual attack team with Quattrone at its center, with the goal of beefing up the number of fee-generating investment-banking deals.
Quattrone “had a traveling entourage, like Allen Iverson going to a basketball game,” Bebel said. He suggested that prosecutors consider reopening a new grand jury investigation focusing on conspiracy or aiding and abetting charges, as well as conferring immunity on Quattrone associates to get them to testify.
Brian O’Neill, a former federal prosecutor now at Santa Monica law firm O’Neill Lysaght & Sun, said the prosecution has “kind of an Iraq problem,” in that it’s difficult to back away from a case “hyped as one of the first opportunities to go after corporate wrongdoing involving a high-level figure.”
The government’s case was perhaps too narrow and unemotional the first time, O’Neill said, considering that “the strongest thing they may have going for them is moral indignation.”
“The challenge is getting juries to care,” O’Neill added. “If it becomes a pure intellectual exercise, it’s a hard case for the prosecution to win.”
Some lawyers say Quattrone’s defense team will gain an advantage in a new trial because it can retool damaging testimony he gave in the first trial.
Times staff writer Thomas S. Mulligan in New York contributed to this report.