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Power Banker Settles Criminal Case

Former star banker Frank Quattrone reached a deal with the government Tuesday that allows his criminal case to be dismissed without a third trial. The pact would close a three-year effort to prosecute a man who earned $100 million in a single year as he commanded his investment firm's technology portfolio at the height of dot-com mania.

U.S. District Court Judge George B. Daniels approved a one-year deferred prosecution agreement, calling for the charges to be dismissed if Quattrone stays out of trouble for one year.

A jubilant Quattrone said outside the courthouse in lower Manhattan that he was "very pleased that the case will be concluded" and looked forward to the dismissal of the charges.

"I plan to resume my business career," Quattrone said.

The judge signed off on the deal during a brief hearing in which Quattrone smiled as the agreement was approved.

In a statement, U.S. Attorney Michael J. Garcia called the deferred prosecution "an appropriate resolution of the case in light of all of the facts and circumstances and the posture of the case at this time."

Quattrone's first trial had ended in a deadlocked jury. Then it later seemed the government had succeeded when a jury convicted Quattrone of charges he obstructed a government probe of stock offerings as he supervised 400 technology investment bankers from the Palo Alto, Calif., offices of Credit Suisse First Boston, which has since changed its name to Credit Suisse (USA) Inc.

Prosecutors alleged Quattrone encouraged co-workers to destroy sensitive company files because he was aware that government investigators were looking at the firm's books. Quattrone always maintained he did not and testified so at two trials.

The U.S. 2nd Circuit Court of Appeals in March threw out the conviction and ordered a new trial, saying the jury was not properly instructed on the law before deliberations.

Four days later, federal regulators overturned a lifetime ban from the securities industry against Quattrone.

Almost immediately, the two sides looked to resolve the case without a third trial.

Before the conviction was tossed, Quattrone was sentenced to 18 months in prison but he was free on bail pending the appeal.

Quattrone, 50, was one of the biggest names on Wall Street during the 1990s Internet stock boom. His actions were scrutinized after the National Association of Securities Dealers in 2000 began investigating CSFB's underwriting of initial public offerings.

The NASD probe was followed by investigations by the Securities and Exchange Commission and a federal grand jury into how the company handled initial public offerings.

The company was never criminally charged, but Quattrone was accused of hindering the federal probe. Prosecutors cited a December 2000 e-mail in which Quattrone endorsed a colleague's suggestion that bankers "clean up" their files.

Quattrone testified that his e-mail followed company policy and that he knew almost nothing about a grand jury subpoena seeking documents involving hundreds of initial public offerings of stock during the late-1990s.

During the dot-com boom, Quattrone took prominent companies like public.

The stage for a deal to end the prosecution was set when the appeals court said any future trial must include the elimination of one line of government questioning that it said went too far and the inclusion of some Quattrone evidence that was kept out.

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