Second Trial for Quattrone Starts
The retrial of Silicon Valley investment banker Frank Quattrone began Friday with prosecutors saying he impeded government investigations that threatened his lucrative investment-banking job, and the defense countering that he never considered the probes when sending an e-mail that lies at the heart of the case.
Though opening arguments followed the broad outlines of the first trial, which ended in a mistrial in October because of a hung jury, both sides altered their presentations.
In the biggest change, the defense gave no indication about whether Quattrone would take the stand. And Jan Little, the partner of lead defense attorney John Keker, delivered the opening instead of Keker.
In the first trial, the defense promised in its opening statement that Quattrone would testify, a controversial strategy that backfired. At least one juror said after the trial that Quattrone’s elliptical answers during cross-examination convinced some panelists that he was guilty and prevented what otherwise might have been an acquittal.
Many defendants do not testify, and defense lawyers agonize over whether to put clients on the stand. It is rare to commit to testimony early on because it forestalls the option of waiting for the case to unfold.
“That’s a 100% good call,” former prosecutor Stephen Ryan said of the decision not to promise Quattrone’s testimony. “He did not do well last time.”
Quattrone was one of Wall Street’s best-paid executives during the late-1990s’ technology boom. As the head of tech banking at powerhouse Credit Suisse First Boston, he handled the initial public stock offerings of bellwethers such as Cisco Systems Inc. and Amazon.com Inc.
Quattrone is charged with two counts of obstructing justice and one of witness tampering.
Prosecutors say Quattrone prodded his staff 3 1/2 years ago to destroy documents sought in probes by the Securities and Exchange Commission and by a federal grand jury. The investigations centered on whether CSFB forced customers to pay kickbacks for access to hot IPOs.
On Friday, Assistant U.S. Atty. Steven Peikin reiterated many of his points from the first trial, often in identical language.
The probes “threatened his business, his reputation and his livelihood,” Peikin said.
Though Peikin altered his presentation in minor ways, the changes nonetheless signaled important strategic shifts.
Peikin seemed intent on pre-empting Quattrone’s claim during the first trial that he knew little about the SEC and grand jury probes and didn’t realize that documents from his tech banking team would be subpoenaed.
Peikin pointed out that the National Assn. of Securities Dealers, a private industry group, conducted an IPO probe before the SEC and grand jury investigations.
The NASD sought documents from Quattrone’s tech banking team, Peikin said. Thus, when Quattrone learned of the two later probes he knew he would be drawn in, Peikin said.
Little countered that Quattrone’s brief e-mail -- in which he encouraged his staff to follow another banker’s suggestion to clean up files -- was simply an order to follow “routine housekeeping procedures.”
