Quattrone Seeks SEC Reversal of Ban

Former star technology banker Frank Quattrone has asked the Securities and Exchange Commission to reverse the decision by a securities industry watchdog to ban him from the profession for refusing to answer its questions in 2003.

Lawyers for Quattrone, who has appealed his May conviction for obstruction of justice, sent the SEC written arguments dated Monday saying that the ban by the NASD (formerly the National Assn. of Securities Dealers) was unconstitutional.

They said their client properly exercised his 5th Amendment right against being compelled to testify while under the threat of criminal prosecution and that “fundamental principles of fairness and justice” require the ban be lifted.

In legal papers signed by lawyer Jerome B. Falk Jr., the lawyers argued that it was important to overturn the ban because they expect to win an appeal of Quattrone’s conviction and his year-and-a-half-long sentence.

If he loses, they noted, NASD rules automatically disqualify him from the industry for 10 years and the NASD would seek to bar him for life based on the conviction.

And the NASD also could resume a proceeding accusing him of violating their rules, including those pertaining to research independence, alleged violations Quattrone vehemently denies, the lawyers said.

“In the end, if Quattrone is found to have committed any substantive wrongs -- either in the criminal case or in NASD’s substantive disciplinary action -- he will be harshly sanctioned,” the lawyers said.

If he is ultimately found innocent in all criminal and civil proceedings, he will still be barred from the industry for life unless the SEC overturns the NASD ruling, the lawyers said.

NASD spokesman Herb Perone said the “issue raised by Mr. Quattrone was very thoughtfully addressed in the National Adjudicatory Council decision last November and we stand by that decision. We will respond to his legal arguments in the proper forum.”