Star banker jailed for 18 months
Former Wall Street star banker Frank Quattrone, who made tens of millions of dollars as he rode the internet stock boom, has been jailed for 18 months for obstructing government probes of hot new stock offerings.
He also was fined €82,000 and sentenced to two years’ probation by US District Judge Richard Owen, who enhanced the sentencing guideline range after agreeing with prosecutors that the former Credit Suisse First Boston banker had lied in the witness box.
Probation officials had recommended five months in prison and five months home confinement. The government had asked for the harsher sentence, saying Quattrone lied when he testified he did not intend to obstruct justice.
Before sentencing, Quattrone told Judge Owen in Manhattan: “I humbly ask that you show mercy and compassion for me and my family, for whom any separation from me would be extremely detrimental.”
Quattrone’s wife is chronically ill and his lawyers have said his 15-year-old daughter has had psychological problems.
Judge Owen said the impact on the family could be softened by its financial assets – Quattrone’s wife has $50m (€41m) and the daughter has $26m (€21m) in a trust fund.
The judge noted that it was not unusual that family members would suffer after a father and husband was convicted of a federal crime. “That’s one helluva blow to a child,” he said.
The sentence makes Quattrone, 48, the most prominent Wall Street figure since junk-bond dealer Michael Milken to face time behind bars.
The case turned on a 22-word email that he forwarded to CSFB bankers on December 5, 2000, encouraging them to “clean up” their files before the holidays.
Quattrone added: “I strongly advise you to follow these procedures.”
At trial, Quattrone, who earned up to €109.9m a year, claimed he was not thinking about continuing government investigations when he sent the email.
He contended it was a simple reminder to follow the company’s document-retention policy.
Quattrone was tried on the same three charges – obstructing a grand jury, obstructing federal regulators and witness tampering – last autumn but that trial ended in a hung jury.
CSFB paid £62m (€90.9m) to settle related civil charges. Quattrone left the bank early last year.
His investment banking stamp was on some of Silicon Valley’s flagship companies in the late 1990s – Amazon.com, Netscape Communications, Cisco Systems and Intuit.
By late 2000, the government was looking into whether some CSFB clients had paid bribes in exchange for getting shares of hot IPOs. The IPO investigation closed with no criminal charges filed.
Lawyers for Quattrone said they plan to take their case to a federal appeals court, arguing Judge Owen inconsistently applied rules about what evidence could be introduced.
