NEW YORK – A U.S. federal court judge Tuesday approved a settlement that would let former star technology investment banker Frank Quattrone avoid a third trial for obstructing justice, opening the door for him to resume his career on Wall Street.
Last week Quattrone, who dominated the world of high flying technology IPOs as Silicon Valley's top banker, reached a deal with prosecutors in which he could avoid a third trial for obstructing justice. Under the deferred-prosecution agreement, Quattrone would suffer no penalty if he did not violate any state or federal laws in the next 12 months.
Under the three-page pact, Quattrone also agreed to report to a U.S. pretrial services officer before traveling abroad, or whenever directed, and "to associate only with law-abiding persons."
The former Credit Suisse Group investment banker, clad in a light gray suit, light blue shirt and red print tie, also did not admit to any wrongdoing as part of the settlement, which was approved by Judge George Daniels of Manhattan Federal District Court after about a 10-minute hearing.
"I approve the deferred-prosecution agreement between the U.S. attorney and Frank Quattrone, so prosecution will be deferred for a period of 12 months," Daniels said in court, after asking the investment banker a series of questions about his understanding of the deal.
The judge also warned Quattrone that if he violated the agreement within the 12-month period it would be revoked.
Quattrone, 50, has maintained his innocence since prosecutors in April 2003 accused him of obstruction of justice when he forwarded an e-mail to colleagues in December 2000 suggesting it was "time to clean up those files."
"I'm very pleased this case will be concluded and I look forward to the formal dismissal of all charges," he told reporters outside the courthouse following the hearing, adding that he planned to resume "my business career."
"Thanks to all of you who have stood by me during the past four years," he added. "God bless you all."
Quattrone declined to answer any additional questions from reporters, or to comment on reports that he will start a boutique advisory and private-equity investment firm.
The Quattrone deal is a blow to U.S. prosecutors, who struggled with a hung jury in his first trial and then saw his conviction in a second trial overturned on appeal. Now after five years, the U.S. Attorney's office in Manhattan has chosen not to pursue a third trial.
"After a thorough investigation it has been determined that the interest of the United States and your own interest will best be served by deferring prosecution," the U.S. Attorney's office said in the agreement.
Prosecutors had tried to portray Quattrone, who underwrote some of the biggest IPOs in the bubble years of the 1990s, as the face of a Wall Street manipulation that led many investors to lose money on high-flying start-ups which quickly faltered.
The government accused Quattrone of trying to block regulatory and grand jury probes into how his firm allocated shares of hot IPOs in the late 1990s. U.S. prosecutors pursued a broad investigation on whether Credit Suisse's Credit Suisse First Boston unit had solicited kickbacks from investors in exchange for access to those offerings.
In a statement Tuesday, Manhattan U.S. Attorney Michael Garcia called the agreement "an appropriate resolution of the case in light of all of the facts and circumstances and the posture of the case at this time."
Lawyers following the case, though, said deferred prosecution agreements are usually given to first-time offenders who commit minor crimes.
"Quattrone has received the same punishment as someone who smuggled a few Cuban cigars into the United States," said Timothy Coleman, co-chairman of Dewey Ballantine's white collar crime practice and a former U.S. Attorney General's office lawyer. "Quattrone has avoided going to jail, and has also avoided the stigma of a conviction."
The government, he added, could not afford to risk losing a third trial and "saved face by extracting some concessions from Quattrone."
Following an appeals court's March 2006 reversal of Quattrone's 2004 conviction, talks began on possibly avoiding a third trial, court records show.
Four days after the reversal, the U.S. Securities and Exchange Commission threw out a lifetime securities industry ban against Quattrone. In May, the NASD, an industry body that also regulates the securities industry, dropped its charges.
The agreement paves the way for Quattrone to resume a 23-year career in investment banking, during which time he raised more than $65 billion in capital for technology companies in 175 IPOs — including those for Amazon.com Inc. , Cisco Systems Inc. , Intuit Inc. and Netscape, now a unit of Time Warner Inc. — as well as 200 other financing transactions.
Quattrone and his team over the years also advised on more than 400 mergers valued at more than $500 billion.
Starting in 1982, he spent 17 years at Morgan Stanley (MS), where he turned a start-up practice into the firm's biggest industry group. In 1996 Quattrone bolted for Deutsche Morgan Grenfell, a unit of Deutsche Bank , where he built a technology banking business that generated $200 million in business in two years.
Quattrone in 1998 jumped again, this time to Credit Suisse First Boston, where as global head of technology banking he generated $5 billion in fees from technology offerings and mergers in five years.