Wednesday, Sept. 8, 2004 | 9:08 a.m.
BLOOMBERG NEWS
NEW YORK -- Frank Quattrone, who earned $120 million in 2000 as Credit Suisse First Boston's top investment banker for technology companies, may receive 21 months in prison, five months more than U.S. sentencing guidelines recommend, a person familiar with the situation said.
Quattrone, 48, faces 10 months to 16 months in prison for impeding investigations of how his bank allocated stock during the technology boom of the late 1990s. Prosecutors asked U.S. District Judge Richard Owen to increase the banker's sentence by five months because Quattrone allegedly lied at his obstruction of justice trial, the person said. Prosecutors haven't said publicly how Quattrone may have lied.
The government's stance on Quattrone's sentencing, scheduled for this morning in federal court in New York, reflects a crackdown by federal prosecutors on white-collar crime in the financial-services industry. Quattrone is the highest-ranking banker to face prison since junk-bond pioneer Michael Milken in 1991.
"Wall Street doesn't grieve," New York University business professor Roy Smith said. "Quattrone is gone. He hasn't been in this business for a long time now. The era that he was in is over -- the crazy IPO period during the height of the Internet bubble." Initial public offerings related to the Internet peaked in 2000.
Robert Chlopak, a spokesman for Quattrone, and Megan Gaffney, a spokeswoman for interim U.S. Attorney David Kelley, declined to comment.
Quattrone, the son of a South Philadelphia pants presser, oversaw a Palo Alto, Calif.-based technology banking group that generated as much as 15 percent of CSFB's revenue during the Internet boom. A summa cum laude graduate of the Wharton School at the University of Pennsylvania, Quattrone took dozens of companies public, including Amazon.com Inc. in 1997.
Quattrone, who tried unsuccessfully to transfer his trial to California because his wife was ill, may request assignment to a prison in that state, as Milken did after he pleaded guilty to securities fraud before serving a two-year term.
The former banker may also seek to remain free pending his appeal. Martha Stewart, who was sentenced in July for obstructing justice, was permitted to do so by the judge who sentenced her to five months in prison and five months home detention.
Quattrone was convicted of two counts of obstruction of justice and one count of witness tampering. A jury deliberated for two days, following a two-week trial. An earlier trial ended with a hung jury in October.
The case hinged on a single December 2000 e-mail written by a colleague who urged CSFB employees to "clean up" their files and discard documents. Quattrone forwarded the message after learning that a grand jury was investigating how CSFB doled out shares in initial public stock offerings.
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