Quattrone Jury to See IPO E-Mails

Federal prosecutors in the retrial of former Credit Suisse First Boston banker Frank Quattrone won permission Monday to introduce e-mails in which he discussed allocation of shares in initial public stock offerings.

The e-mails, which were not admitted during Quattrone’s first trial last fall on obstruction-of-justice charges, could bolster the government’s claim that the former head of CSFB’s technology unit had a motive to urge colleagues to destroy documents, as prosecutors contend he did. Quattrone, 48, has said he wasn’t aware that government investigations of the bank extended to his unit and thus he had nothing to fear from them.

The disclosure of the e-mails came on day two of Quattrone’s retrial in federal court in Manhattan.

Quattrone, who lives in Palo Alto, ran CSFB’s Silicon Valley technology unit for almost five years until he resigned last year. His unit managed numerous computer-related stock sales at the height of the Internet boom

Quattrone’s first trial ended in a hung jury, with members of the panel divided 8 to 3 in favor of conviction. On direct examination at that trial, Quattrone testified that IPO allocations were “something that happened in a different department than mine.”

On cross-examination, he said that he “might have participated” in discussions about IPO distributions and that he didn’t decide allocations. He acknowledged writing e-mails recommending allocations for some banking clients.

In one e-mail exchange prosecutors plan to introduce, CSFB banker Benjamin Bloomstone wrote to Quattrone on Feb. 14, 2000, “I just want to make sure that we are taking care of Larry Bowman properly,” referring to the founder of Bowman Capital Management, a San Mateo, Calif., hedge fund manager. “He informed me that he has also led some deals our way, which would certainly be important for me to know re the allocation process.”

Quattrone replied, “To set the record straight, he screwed us on an ipo for noosh where we were awarded the books, goldman came in late and he recommended that they go with gs [Goldman Sachs].”

Noosh Inc., a Santa Clara, Calif., company that runs an online market for printing services, withdrew its planned IPO in May 2000. Goldman Sachs Group Inc. was among the underwriters on the stock sale.

Two days after his message to Bloomstone, Quattrone e-mailed Bowman and suggested they have a “summit meeting” to talk about IPO allocations.

In testimony Monday, CSFB banker Jeffrey Bunzel said investment bankers who worked for Quattrone sometimes suggested which investors should receive shares in lucrative initial public offerings.

“From time to time, they will have some input in the process,” Bunzel told jurors.

Quattrone says his role in the allocation process was minimal. The extent of his involvement is crucial because his lawyers say Quattrone wasn’t thinking of the investigation when he sent an e-mail Dec. 5, 2000, urging bankers to clean up their files. Eight hours earlier, Quattrone was told he might be called as a witness in the IPO probe.