This Time, Quattrone Faces a Verdict

The jury in the ex-tech banker's retrial appears to be a serious, analytical, and thorough bunch -- and highly unlikely to be hung

For Frank Quattrone, it seemed like good news. As the jury in his retrial on obstruction-of-justice charges began its deliberations on Apr. 30, a request came from their closed session to the Manhattan Court judge. The jurors asked to review reams of testimony, including a briefing book prepared by the defense explaining why Quattrone forwarded to his staff a Dec. 5, 2000, memo urging them to clean out their files. He was very busy at the time, the defense argued, and the note was inconsequential. Federal prosecutors say his e-mail obstructed their investigation into alleged securities-law violations by Quattrone's employer, Credit Suisse First Boston.

When Quattrone saw the list of jury requests, he smiled broadly, and chatted excitedly with one of his attorneys in the courtroom. But while his second trial went decidedly better than the first, the 48-year-old Silicon Valley legend can take little comfort as the jury reconvenes on May 3.


  Quattrone's first trial ended in October with a hung jury and a mistrial, even though he was combative on the witness stand and acknowledged that he had said things that weren't true. This time, his performance was more polished. He made no such gaffes. Yet the facts in the case remain the same -- and, based on them, a majority of the 11 jurors in the first trial were prepared to find him guilty, according to jurors interviewed after the mistrial.

For the most part, the trials followed similar paths, with many of the same witnesses answering the same questions. Prosecutors made the case that, starting in the spring of 2000, Quattrone was told no fewer than 19 times by CSFB attorneys about investigations into the bank's process for stock allocations in initial public offerings by the National Association of Securities Dealers, the Justice Dept., and the Securities & Exchange Commission.

The warnings culminated on Dec. 3, 4, and 5, 2000, with Quattrone being told that charges might be filed against the company and that he should get a personal attorney since he might be called as a witness. One of Quattrone's subordinates -- who didn't know of the investigations -- sent an e-mail to the company's technology investment banking staff on Dec. 4 urging them to clean out their records of IPO deals. Quattrone, who ran tech investment banking, read the e-mail that evening, began to reply, set it aside, and the next day urged people to comply with the request.


  The prosecution charges that Quattrone sent the e-mail because he wanted to destroy evidence that could have harmed the company and his lucrative banking business. "He had a choice," David Anders, an assistant U.S. Attorney, told jurors in closing arguments. "He chose to tell people in his tech group to clean out their files and destroy documents. He committed a crime."

The defense insists that Quattrone did no such thing, contending he didn't believe the investigations were aimed at him or his group and he didn't mentally connect the warnings about the investigations with the e-mail. "He sent an e-mail as part of his regular job with an innocent state of mine," Quattrone's lead attorney, John W. Keker, said in his closing argument to the jury. "They're trying to turn this 22-word snippet into a crime. It makes no sense."

Keker spent most of his time focusing on the circumstantial nature of the prosecution's case and arguing that Quattrone's guilt hadn't been proven beyond a reasonable doubt.


  During the first trial, Quattrone had at first claimed that he had nothing to do with the allocations of IPO stock to money managers and important individual investors -- only to later admit that he was involved. He also claimed in testimony in the first trial that he didn't know what a grand jury was. This time around, he made no such claims. But, even so, prosecutors made sure the jury knew how he conducted himself in the first trial by reading sections of testimony aloud.

The latest jury is giving all indications of being a serious, analytical, and thorough bunch. After meeting for less than two hours on Apr. 30, they sent a note to Judge Richard Owen asking for transcripts of testimony by Quattrone and two other witnesses, all e-mails in evidence that Quattrone received and sent, as well as the defense briefing book involving the three crucial days in December at the heart of the case.

The jury also asked if it could use the lack of other federal charges against Quattrone as evidence about his motives. The judge is expected to tell the jury on May 3 that it can't consider the lack of other charges as a factor in its deliberations.

Given the jury's interest in voluminous documents, it doesn't seem like they'll reach a hasty decision. Still, most legal observers expect Quattrone's fate to be decided by the end of the week.

By Steve Hamm in New York

Edited by Douglas Harbrecht