Updated from 3:34 p.m. EST

Frank Quattrone, the ex- CSFB technology banker whose conviction on obstruction of justice charges was viewed by many as the tech bubble's comeuppance, was ordered retried Monday after a federal appeals court found fault with jury instructions in his trial.

The appellate court ordered a fresh trial for Quattrone and directed that case to be reassigned to a new judge. Quattrone, who is 50 years old, received an 18-month sentence in September 2004 but remained free as the verdict was appealed.

Given that this would be the third time prosecutors would have to try Quattrone, it's possible they could seek to cut their losses by negotiating a plea deal.

"One would hope the government would act with wisdom and compassion and understand that sometimes enough is enough,'' says Seth Rosenberg, a New York white-collar defense attorney.

After one trial ended deadlocked, a federal jury in Manhattan convicted Quattrone in May 2004 on charges of obstructing a grand jury, obstructing federal regulators and witness tampering.

The case against Quattrone stemmed from a single email in which he 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, because he had just become aware of a federal investigation into CFSB's IPO practices.

The appellate court said U.S. District Judge Richard Owen's faulty instructions permitted the jury to convict Quattrone without considering whether or not he harbored a "wrongful'' or "corrupt'' intent in sending that email.

"Given the court's instruction for the nexus determination, all that need be proven was that an investigation had called for certain documents and that the defendant had ordered the destruction of those documents,'' the appellate court said in a 61-page ruling.

The criminal investigation of CSFB's practice of dishing out hot IPO shares to favored clients and hedge funds in return for higher-than-normal commissions, or "kickbacks,'' ended without any charges being brought. But in 2002, CSFB settled a related civil investigation by the Securities and Exchange Commission and the NASD by paying a $100 million fine.

Meanwhile, in directing that the matter be assigned to a new trial judge, the appellate court said it didn't find any evidence of prejudice or impartiality on Owen's part. But the appellate judges said the case had taken a "toll on all involved,'' and it made sense for another judge to preside over a new trial.

"While we have considered the government's arguments and do not find evidence that the trial judge made any inappropriate statements leading us to seriously doubt his impartiality, portions of the transcript raise the concern that certain comments could be viewed as rising beyond mere impatience or annoyance,'' the appellate court ruled.