Frank Quattrone, formerly one of Silicon Valley's most influential dot.com investment bankers, yesterday won an appeal against his conviction for obstructing a federal investigation and witness tampering.
While the US Court of Appeals for the 2nd Circuit found that there had been sufficient evidence to convict him, it ruled that Judge Richard Owen had not instructed the jury properly.
In particular, wrote the Appeals Court, “Under the charge, the jury was allowed to convict Quattrone of obstruction regardless of whether he intended such.”
Effectively, the jury had not been told to consider whether Quattrone had actually intended to obstruct the investigation before finding him guilty. As a result, the conviction had to be quashed. The Court has remanded the case for a retrial before a different judge.
The case dates back to December 2000, when Quattrone sent an email that allegedly urged colleagues to "clean up" their files.
Quattrone and his former firm Credit Suisse First Boston (CSFB) promoted and arranged Initial Public Offerings (IPOs) for many technology companies in the late 1990s.
According to regulators, Quattrone personally earned $200 million from mid-1998 to late-2001. But in mid-2000, investigations began on allegations that CSFB had improperly shared IPO profits with clients.
The only criminal charges to come out of the investigations were those against Quattrone. He was accused of sending an email on 5th December 2000 urging colleagues to "clean up those files" – after learning that regulators were beginning an investigation.
A first prosecution against Quattrone failed in October 2003 when a jury was unable to reach a unanimous verdict after six days of deliberations. He was eventually convicted in May 2004.
Quattrone was sentenced to 18 months in prison, but has remained free pending his appeal.
"For over three years during this difficult ordeal, I have held my head high knowing I was innocent and never intended to obstruct justice,” he said yesterday.
