Doubt Swirls Around Quattrone

Updated from 12:35 a.m. EST

Credit Suisse First Boston broke ranks with Frank Quattrone on Monday, after turning up emails that suggest he might have known the bank faced a federal investigation when he told employees to throw out documents in December 2000, according to a source.

The emails between Quattrone, arguably the most powerful investment banker of the Internet era, and the firm's then-general counsel indicate the two discussed what to do if clients asked about the probe, which focused on the bank's IPO allocation practices, a person familiar with CSFB's internal inquiry said.

CSFB said it had begun its own investigation of the powerful investment banker and would place him on administrative leave pending its completion.

Through a spokesman, Quattrone said: "I did nothing wrong. I am confident that the investigation will show that."

Quattrone already faces charges from securities regulators for allegedly directing CSFB research analysts to tailor their ratings to help attract banking business, as well as for allegedly doling out hot initial public offering shares to favorite clients.

It was reported last week that regulators are reviewing a Dec. 4, 2000, email sent by CSFB investment bankers telling employees to purge certain emails as the firm braced for investor lawsuits over fallen IPO shares. Shortly after it was sent, reports emerged that some of the bank's IPO practices had drawn the interest of securities regulators, including the NASD and the Securities and Exchange Commission.

CSFB, early last year, paid a $100 million fine to resolve that investigation, which involved allegations that the Wall Street firm took "kickbacks" from some money managers seeking to get IPO allocations.

CSFB, in its release Monday, said Quattrone was placed on leave after the company uncovered information that "raised questions" about whether he had been aware of that regulatory inquiry, when his office circulated the email about "document retention" practices at the firm. CSFB said that in light of the new information, it had "questions about whether Mr. Quattrone had acted appropriately in December 2000 when he sent that email and permitted a subordinate to send a similar email to employees."