Court deal frees Quattrone for Wall Street return

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The Independent Online

Frank Quattrone, one of Wall Street's highest-profile investment bankers during the dot.com era, is poised to make a return after his lawyers brokered a deal with government prosecutors to allow a long-running criminal case against him to be dismissed.

Under the terms of the deal, Mr Quattrone, formerly of Credit Suisse First Boston (CSFB) and who once earned more than $120m (£63.5m) a year, will see the prosecution against him dismissed as long as he avoids any sort of criminal trouble. Mr Quattrone agreed to the deal but admitted no wrongdoing.

After a judge in New York approved the one-year deferment of the prosecution, Mr Quattrone emerged from the court to tell reporters he planned to get back to doing what he enjoyed best. "I'm very pleased the case will be concluded, and I look forward to formal dismissal of all charges," he said. "I plan to resume my business career."

For the past three years, Mr Quattrone, 50, has been at the centre of a series of court cases related to allegations that he interfered with a government inquiry into stock offerings as he oversaw more than 400 technology investment bankers at the height of the dot.com boom.

His behaviour came under investigation after the National Association of Securities Dealers (NASD) began investigating CSFB's underwriting of public offerings. The first prosecution against him ended with a jury deadlocked. A subsequent trial in 2004 resulted in a conviction against him when prosecutors were able to make their case on the basis of an e-mail message that suggested Mr Quattrone had encouraged his colleagues to destroy potentially sensitive financial records. He was sentenced to 18 months in jail but freed on bail while his lawyers appealed against the conviction.

That conviction was indeed thrown out on appeal in March and a new trial was ordered on the basis that the original jury had not been adequately instructed on the law they were considering.

From that point, prosecutors and lawyers for Mr Quattrone, who has always maintained he did not interfere with the investigation, have been trying to reach a deal to avoid another trial.

John Coffee, a law professor at Columbia University, told Bloomberg News: "It is a morally ambiguous resolution, and I think that's precisely what's appropriate to these facts. The evidence against Mr Quattrone was fairly thin and equivocal. [The prosecution's reliance on the e-mail] probably strikes most lawyers as being just on the borderline, or just below, what proof beyond a reasonable doubt should require."

That single e-mail was written in 2000 by a Credit Suisse colleague. Mr Quattrone had forwarded the message, saying his experience as a witness in a securities fraud case led him to "strongly advise" his employees to follow the bank's document- retention policy, which called for routine purging of records. It was claimed that Mr Quattrone had passed on the message after he learned that investigators were looking into the company.

A criminal conviction would have barred Mr Quattrone from the securities industry for years. NASD, which regulates the industry, previously dropped a case accusing Mr Quattrone of improperly awarding shares in initial public offerings. The Securities and Exchange Commission also rescinded his lifetime ban from the securities business.

The two-page agreement between government prosecutors and Mr Quattrone's lawyers required the bankers to obey the law, associate "only with law-abiding persons" and inform the court before changing residences or travelling outside the US. In a statement, the prosecutor Michael Garcia said: "The agreement is an appropriate resolution of the case in light of all of the facts and circumstances and the posture of the case at this time."

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