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Star Banker Quattrone Found Guilty

Former investment banker Frank Quattrone, left, and his attorney John Keker return to Manhattan Federal Court Monday, May 3, 2004, after a brief coffee break during jury deliberations on his retrial on charges of obstruction of justice and impeding an investigation.
AP
Frank Quattrone, a star investment banker during the Internet stock bubble, was convicted Monday of obstructing justice by sending a 22-word e-mail encouraging colleagues to destroy files.

A federal jury in Manhattan, deliberating on its second day, returned guilty verdicts on all three counts against Quattrone -- obstructing a grand jury, obstructing federal regulators and witness tampering.

Quattrone showed no reaction when the verdict was read, but afterward hugged and kissed his weeping mother and sister. His sentencing was scheduled for Sept. 8.

"I feel like we failed Frank. He's innocent," said his lawyer John W. Keker, adding that an appeal was planned. "There's an awful lot of evidence that the jury didn't hear."

The prosecution had no immediate comment.

Quattrone was tried last fall on the same charges, but the judge declared a mistrial after jurors repeatedly said they were deadlocked.

The verdict Monday likely means the 48-year-old former banker will go to prison, perhaps for more than a year.

"We wanted to do what we felt was the right thing. It wasn't easy at all," said juror Sheldon Silver, 58, a receptionist for a public relations firm. He said jurors found it difficult to gauge Quattrone's state of mind when he sent the e-mail.

Quattrone's e-mail on Dec. 5, 2000, urged colleagues at Credit Suisse First Boston to destroy documents. At the time, a grand jury and federal regulators were investigating the bank's stock-allocation practices. The probe never resulted in criminal charges, and the bank later paid a $100 million civil settlement.

Quattrone was told two days before he sent the e-mail that a grand jury was investigating the bank. But he claims the note was a simple endorsement of company policy, which required regular document destruction.

Earlier Monday, U.S. District Judge Richard Owen answered a question the jury had asked in a note Friday as it began deliberating. Jurors asked whether they could consider the absence of other charges against Quattrone as circumstantial evidence in deciding the obstruction case.

"It is your task to decide only the three charges in this indictment," the judge said.

Jurors had earlier heard a read-back of Quattrone's testimony in which he claimed a CSFB lawyer told him in that conversation, on Dec. 3, 2000, that the investigation concerned high fees paid by hedge funds.

The jury also heard a read-back of Quattrone's testimony about his involvement in a 1991 securities trial in Texas in which his employer at the time, Morgan Stanley, was a defendant.

Quattrone testified that Morgan Stanley was cleared of liability in part because it had been responsible about keeping documents.

By Erin McClam