Capital Markets

Quattrone Sentenced to 18 Months

Ex-Credit Suisse First Boston banker was charged with blocking an investigation into how the investment bank allocated IPO shares during the boom.
Stephen TaubSeptember 9, 2004

“Clean up those files.”

Those were the fateful words sent via E-mail that have landed former Credit Suisse First Boston investment banking executive Frank Quattrone in prison after being convicted of obstruction of justice charges.

U.S. District Judge Richard Owen in Manhattan sentenced Quattrone to 18 months behind bars and two years probation and fined him $90,000, according to the Associated Press. He was also denied bail.

Probation officials had recommended five months in prison and five months of home confinement, the same sentence Martha Stewart received for her obstruction of justice conviction.

The government however, had requested the harsher sentence, arguing that Quattrone lied when he testified he did not intend to obstruct justice, according to the report.

Before the sentencing, Quattrone reportedly told the judge: “I humbly ask that you show mercy and compassion for me and my family, for whom any separation from me would be extremely detrimental.”

His wife is said to be chronically ill, and Quattrone’s lawyers have reportedly said his 15-year-old daughter has had psychological problems.

Quattrone becomes the most prominent Wall Street figure to head to jail since junk-bond promoter Michael Milken.

The 48 year-old was accused of blocking an investigation into how the investment bank allocated shares of initial public offerings during the technology and Internet boom of the late 1990s.

Some observers were not surprised by the length of the sentence. Judge Owen, after all, once sent financier Martin Armstrong to jail on contempt charges during a pretrial hearing in 1999, according to The New York Times. He is still in prison on the contempt charges.

Quattrone has said he’ll challenge Owen’s trial rulings on appeal, according to Bloomberg. He claims the judge gave jurors misleading instructions about the government’s burden of proof and denied him a fair trial by excluding evidence the defense wanted to offer, the wire service added.