Updated from 2:17 p.m. EDT
Federal prosecutors are looking a lot more effective than they did seven months ago.
Fresh off their Martha Stewart conviction, the government nailed up a second hide Monday when a New York jury convicted former technology-investment banker Frank Quattrone, on obstruction of justice in his second trial.
A jury in Manhattan returned guilty verdicts on all three counts against the former
Credit Suisse First Boston banker
-- obstructing a grand jury, obstructing federal regulators and witness tampering -- after just seven hours of deliberation.
The quick guilty verdict was a stunning reversal for Quattrone, whose first trial ended last October in a hung jury after six days of deliberation. In that case, a slim majority of jurors had favored a conviction of the man who once earned $120 million in a single year.
The conviction means the mustachioed 48-year-old banker, who brought more tech firms to market during the 1990s than any other investment banker, could be sentenced to more than a year in prison.
Quattrone's lawyer, John Keker, said he was disappointed with the verdict and said his client would appeal.
The second trial was similar to the first. In a surprising move, Quattrone again took the stand in his own defense, a gambit that led several jurors to vote for conviction when they otherwise wouldn't have.
The case against Quattrone stemmed from a single email in which Quattrone recommended that his staff clean out their files and destroy documents. Quattrone and his lawyers portrayed the email as a routine Wall Street housekeeping move. But prosecutors said Quattrone had a more sinister motive, since he had just become aware of a federal investigation into CFSB's IPO practices.
The trial's larger theme was CSFB's practice of dishing out hot IPO shares to favored clients and hedge funds in return for higher-than-normal commissions, or "kickbacks." But the criminal investigation of CSFB ended without any charges being brought. In 2002, CSFB settled a related civil investigation by the
Securities and Exchange Commission
by paying a $100 million fine.
But prosecutors told jurors it didn't matter that the initial investigation ended without any criminal charges being filed. What mattered was whether Quattrone had the intent in that Dec. 5, 2000 memo to interfere with the investigation.
With the Quattrone conviction, federal prosecutors are now 2-for-2 in corporate scandal trials. In March, domestic diva, Martha Stewart, was convicted of obstruction of justice and conspiracy. Prosecutors hope to score a trifecta in a few weeks when jurors begin deliberating in the corporate fraud trial involving several former
cable company executives.
The success of the federal prosecutors in the Quattrone and Stewart cases stands in contrast to the recent mistrial in the
corruption trial in New York State court. A New York State judge declared a mistrial after six-months of testimony when the jurors were unable to reach a verdict.
Quattrone is the most significant Wall Street figure to face a prison term since Michael Milken, the king of the junk bonds, who went to jail in the early 1990s.
In the email in question, Quattrone reminded his underlings to "clean up their files," meaning they should destroy any unnecessary documents to avoid potential civil litigation. Quattrone's controversial email actually was a response to a longer email penned by one of his underlings, Richard Char.
In that message, Char reminded the technology investment banking team of the danger of keeping around unnecessary documents that might later be used against the firm in civil litigation.
After the email was sent out to the banking team, Quattrone chimed in with a one-sentence reply that, more or less, echoed Char's admonition.
Even before the jury's verdict, Quattrone's life on Wall Street seemed over. Last March, he resigned from CSFB just before prosecutors filed criminal charges against him. Also, earlier this year, a NASD hearing panel fined him $30,000 and suspended him from working on Wall Street for a year for failing to cooperate with an investigation.