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CSFB Denials Raise Eyebrows

Jun
6
2001

Editor’s Note:This post originally appeared as a news story in The New York Post.

Mention the formal statements that Credit Suisse First Boston has made about the head of its technology group — investment banker Frank Quattrone — and you’ll get reactions from Silicon Valley insiders ranging from polite confusion to scornful incredulity.

“Frank Quattrone is responsible for delivering the firm’s investment banking services to technology clients,” CSFB has said in a statement. “He is not and was not responsible for overseeing brokerage accounts or commissions, nor is he or was he responsible for IPO allocations.”

It strikes a discordant note for many because Quattrone’s years-long pitch to Silicon Valley executives has been that CSFB would be a one-stop, tech-friendly and tech-savvy shop for all their corporate banking needs. Quattrone assured his clients that he and his trusted, long-time associates — Bill Brady, head of corporate finance for the tech group and mergers and acquisitions expert George Boutros — would provide those services.

“One of the things Frank talked about was our dedicated tech support team,” said one former employee, recalling private and public statements Quattrone had made.

For clients, there was no doubt Quattrone was in charge. “Love him or hate him, he has an IQ like a machine,” said one former CSFB client. “He’s a control freak. He’s very smart. When you didn’t do what he thinks you should as a client, he was on you in a minute.”

CSFB — as well as almost every other major investment bank on Wall Street — is facing a slew of private shareholder lawsuits and a suit by a former client over IPO allocations. The banks are also under investigation by the U.S. Attorney’s office in Manhattan, the Securities and Exchange Commission and the National Association of Securities Dealers.

The government is said to be looking at allegations that there were demands for payment of higher-than-usual commissions in return for IPO allocations. They are also probing alleged links between allocations and promises to buy stock in the after-market.

The bank says Quattrone wasn’t involved in any such transactions, emphasizing that its trading desk is located in New York, far away from the tech group’s Palo Alto office. But one hedge fund manager points to the activities of CSFB managing director Andy Fisher — who relocated from the bank’s New York office to Palo Alto last spring — as an indication that Quattrone may have played some role in IPO distributions.

Fisher is head of equity capital markets within the CSFB tech group, according to an organizational chart the bank gave customers last year. It shows Fisher reporting directly to Brady who, in turn, reports to Quattrone.

Fisher’s bio, released for a public appearance last year, talks about his extensive knowledge of the tech issues CSFB has handled. “His responsibilities include managing the origination and execution of equity transactions for all U.S. technology clients,” it reads.

One dissatisfied Silicon Valley fund manager said he was referred to Fisher when he expressed dissatisfaction over his IPO allocation. “He’s the guy I called,” he said. “He allocated shares in the deal. I know that for a fact.”

A CSFB spokeswoman flatly disputes that account. “Andy Fisher, co-head of equity capital markets origination for the technology industry, reports solely to the global heads of equity capital markets in New York,” she said. “The allocation of shares in public offerings is the function and responsibility of the syndicate desk in New York.”

Fisher moved from New York at Quattrone’s behest, says a former CSFB employee. “Frank wanted somebody in charge of tech trading,” said the former employee. “That’s why he (Fisher) was out here.”

CSFB was sure to include Fisher and his equity group in its promotional material, emphasizing the organization’s closeness. “This was in pitch books, anything they ever distributed,” said the former employee.

So why did Fisher move? “He just moved to be close to the clients,” the CSFB source.

Well, the office where he works isn’t as crowded as it used to be. CSFB has had layoffs just like every other investment bank. But one move, in particular, is raising eyebrows.

Boutros, who has been a close associate of Quattrone’s since the two worked together at Morgan Stanley, is no longer housed in Palo Alto. He and the bank’s mergers and acquisitions group are working from offices in San Francisco. The tech group’s private equity placement group has also moved to San Francisco.

Share  Posted by Chris Nolan at 9:42 PM | Permalink

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