- The Washington Times - Wednesday, September 8, 2004

NEW YORK (AP) — Former star investment banker Frank Quattrone, who made tens of millions of dollars as he rode the Internet-stock boom, was sentenced to 1 years in prison yesterday for obstructing government probes of highly touted tech-stock offerings.

U.S. District Judge Richard Owen ordered Quattrone to surrender in 50 days, and granted a defense request to recommend that Quattrone be sent to a prison camp in California, where he lives. He also was fined $90,000 and sentenced to two years probation.

The judge enhanced the sentencing guideline range after agreeing with prosecutors that the former Credit Suisse First Boston banker had lied on the witness stand when he testified he did not intend to obstruct justice. Probation officials had recommended five months in prison and five months of home confinement.

Before the sentencing, Quattrone told Judge Owen in Manhattan in a steady voice: “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 Quattrone’s lawyers have said his 15-year-old daughter has had psychological problems.

Judge Owen said the effect on the family could be softened by its financial assets; the wife has $50 million and the daughter has $26 million 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.

The sentence makes Quattrone, 48, the most prominent Wall Street figure since junk-bond dealer Michael Milken to face time behind bars.

The Quattrone case turned on a 22-word e-mail message that Quattrone forwarded to CSFB bankers on Dec. 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 claimed he was not thinking about ongoing government investigations when he sent the e-mail. 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 fall, but that trial ended in a hung jury.

CSFB paid $100 million to settle related civil charges. Quattrone left the bank in early 2003.

Quattrone’s investment-banking stamp was on some of Silicon Valley’s flagship companies in the late 1990s — Amazon.com, Netscape Communications Corp., Cisco Systems and Intuit, among others.

By late 2000, the government was looking into whether some CSFB clients had paid kickbacks in exchange for getting shares of popular initial public offerings. The IPO investigation closed with no criminal charges filed.

Lawyers for Quattrone have said they plan to take their case to a federal appeals court, arguing Judge Owen inconsistently applied rules about what evidence could be introduced.

Quattrone made as much as $120 million a year at CSFB. He gained fame in the industry by taking technology companies like Amazon and Netscape public for various banks.


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