SEC Rejects Industry Ban Against Quattrone

The Securities and Exchange Commission on Friday threw out a lifetime securities industry ban by the NASD against Frank Quattrone, four days after a federal appeals court overturned the former star investment banker’s 2004 conviction on obstruction and witness tampering charges.

The SEC said the NASD, the securities industry’s self-regulatory arm, “did not act in accordance with its own rules” in issuing the ban in November 2004. The NASD had said the ban resulted from Quattrone’s refusal to testify in an NASD probe of his role in possible document destruction and obstruction of justice at his former employer, Credit Suisse First Boston.

On Monday, a unanimous three-judge panel of the U.S. 2nd Circuit Court of Appeals sent Quattrone’s criminal case back to the trial court with instructions that it be reassigned to a new judge. The panel found that the original trial judge, Richard Owen, gave erroneous jury instructions.