Former CSFB star Quattrone gets 18 month prison sentence

Click to follow

Frank Quattrone, the former star Credit Suisse First Boston investment banker whose deal-making helped fuel the 1990s boom in technology shares, was yesterday sentenced to 18 months in prison, in one of the harshest sentences ever by US regulators against prominent members of the financial services industry.

Frank Quattrone, the former star Credit Suisse First Boston investment banker whose deal-making helped fuel the 1990s boom in technology shares, was yesterday sentenced to 18 months in prison, in one of the harshest sentences ever by US regulators against prominent members of the financial services industry.

The sentence was handed down in a federal court in New York after Quattrone had been found guilty of obstructing justice when he urged CSFB employees to "clean up" files.

Quattrone had forwarded the message after learning that a grand jury was investigating how CSFB doled out shares in initial public stock offerings. US regulators have been cracking down on the entire investment banking industry, including handing out some swingeing fines, over charges that favoured clients where favoured in share allocations of popular IPOs.

Richard Owen, the district judge presiding over Quattrone's trial, chose a sentence in the middle of the range according to US law. He also ordered Quattrone, who earned $120m (£67m) at CSFB in 2000, to pay a $90,000 fine, noting that it was the maximum he could impose.

Quattrone, 48, was in May convicted on two counts of obstruction of justice and one of witness tampering. Prosecutors also accused Quattrone of lying under oath in the first case against him, which ended in a hung jury last year.

While there has been no suggestion that Quattrone committed a fraud, the government's hard line attitude towards his obstruction of justice reflects its determination to punish the questionable practices among the investment banks during the boom years of the 1990s.

Accompanied by members of his family, Quattrone addressed the judge before he announced his prison sentence, saying: "I humbly ask that you show mercy and compassion for me and my family." Quattrone's combative lawyer, John Keker, had asked for a lighter sentence because his client's wife is housebound and has been seriously ill for some time. The court also heard that Quattrone's 15-year-old daughter suffers from bulimia.

Judge Owen was unmoved, saying: "There's $50m of assets out there to take care of Mrs Quattrone and $26m to take care of Cristina in a trust fund." Quattrone, who is likely to serve his sentence in a low-security prison near where his family lives in California, is appealing against his conviction. His appeal lawyer, Mark Pomerantz, yesterday said the case which culminated in the May conviction had been "deeply flawed". Judge Owen also denied a request for bail, ordering Quattrone to surrender himself to prison authorities within 50 days. His lawyers said they would appeal this order.

After hearing his sentence, Quattrone said: "Dad's coming home. I'm OK. I can hold my head up high because I know I am innocent."

Comments