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Quattrone Must Defend Case in N.Y.

August 07, 2003|From Bloomberg News

Former Credit Suisse First Boston investment banker Frank Quattrone, who is accused of urging colleagues to destroy documents sought by securities investigators, must stand trial in New York, not San Francisco, as he sought, a judge ruled Wednesday.

U.S. District Judge Richard Owen in Manhattan rejected Quattrone's bid to have the case transferred to California. Quattrone, who lives in Palo Alto, requested the move to accommodate witnesses and his ailing wife, who won't be able to attend his obstruction-of-justice trial on Sept. 29.

A Quattrone spokesman declined to comment.

Quattrone was indicted in May and has denied any wrongdoing.

He is the first Wall Street executive charged in connection with government probes of initial public stock offerings that began in 2000. His Silicon Valley unit managed the most computer-related IPOs during the Internet boom.

Prosecutors say Quattrone urged fellow bankers to destroy documents related to IPOs after he learned that investigators had subpoenaed records.

Owen also denied Quattrone's request that prosecutors be ordered to provide names of witnesses and other details from a 2001 investigation of how CSFB doled out IPO shares. Defense lawyers sought to show that an e-mail Quattrone sent that is central to the government's case didn't interfere with the probe.

According to the indictment, Quattrone had learned from CSFB's lawyers by Dec. 4, 2000, that the Securities and Exchange Commission and the Justice Department were investigating the firm's IPO practices.

That same day, the indictment says, Richard Char, global head of the bank's Execution-Technology Group, sent e-mails to top CSFB officials, including Quattrone, urging compliance with the firm's policy on document retention. The policy calls for destroying some records.

Prosecutors say Quattrone forwarded an e-mail to the same group of employees on Dec. 5 and added a brief message: "having been a key witness in a securities litigation case in south texas (miniscribe) i strongly advise you to follow these procedures." Prosecutors say the e-mail shows Quattrone wanted bankers to destroy evidence.

Quattrone says he never saw the subpoenas and didn't know the government's IPO investigation would extend to his investment-banking unit.

CSFB agreed to pay $100 million in January 2002 to settle charges related to claims it distributed shares in IPOs in exchange for kickbacks.

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