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Welcome to New York, Mr. Hodge

Oct
9
2003

Today, Thursday, was a very good day for Frank Quattrone. He began testifying on his own behalf before a standing room only audience of former employees, prosecutors from the U.S. Attorney’s office — that was the row against the wall — and the press.
For the first hour, the jury loved him. The dickheads were happy, congratulating Quattrone. Even Boutros was smiling.
But yesterday wasn’t such a good day. CSFB banker John Hodge — a big, blond example of what makes Stanford University the place it is — got sliced and diced by prosecutor Dave Anders. (Note to Mr. Anders’ mom: I am very sorry to have renamed your son in Thursday’s Post. You don’t know how upset I was to hear that you actually live in New York City).
In addition to having to be ordered — it went past cordial reminders — by the judge to answer Anders’ questions, Hodge was probably the most uncomfortable witness of the trial, squirming in his seat, hesitating and stammering as he realized that Anders had him on one important point. There is nothing in CSFB’s policies that says that bankers have to be told by lawyers what to do if they think there’s a lawsuit in the works.
And there is no better picture of the differences between the way they do things in New York and the way they do things in California than the pained expression on Hodge’s face as he was cross-examined. It’s rough stuff on this side of the country. And, as too few people are learning a bit too late, this is the place where it really counts.
Before Hodge, Richard Char, the guy who wrote the “clean up those files” mail took the stand. He, too, found himself slowly but surely agreeing with Anders. Nope, no one had to tell him what to do when litigation loomed. Char, a soft-spoken guy to begin with, took the cross-examination in stride probably because he’s a lawyer (formerly with Wilson Sonsini — one more reason why Larry Sonsini turned down Dick Grasso’s job). But the judge had to ask him to speak up at one point, his responses were so soft.
Char also painted one part of the picture that’s been missing from this whole thing: What the office looked like. It was a mess. Any policies on keeping documents or tossing notes and drafts had clearly gone out the window. Files were everywhere. That’s not a surprise given the sheer amount of work that CSFB did in 1998 and 1999. But, well, that’s just what the prosecutors want the jury to wonder about. From such seeds convictions grow.
This is not to put a damper on what may or may not happen next week when Quattrone’s jury deliberates. They may well acquit him. If they like him, they will almost certainly acquit him. But if they don’t, he’s done.
All in all, Keker has done a good job of painting the CSFB team as a bunch of well meaning, slightly naive guys who were more interested in deals and complying with the law and being stand-up soldiers. How much of that sticks remains to be seen.
Particularly since the government prosecutors aren’t amateurs, either. Take a look at what the WSJ had to say about them. The stakes here are high, very high, on both sides. This isn’t just a career-making conviction for lead assistant U.S. Attorney Steve Peikin. It’s a very rare opportunity to actually cross-examine a smart, wiley, well-prepared defendant. Quattrone’s up for it, for sure. But so is Peikin.
Andrew Ross Sorkin, who dresses a lot like a dickhead, what with the little silk cufflinks and the flannel suit — pinstripes, no less — told me to ‘blog him and since I always do what the NYTimes tells me, I am happy to oblige. Ain’t that right, Markoff?
UPDATE: From the be-careful-what-you-wish-for department. The bit on Sorkin got picked up, misunderstood and showed up on Elizabeth Spiers’ New York mag-based ‘blog Friday.
This prompted Andy’s mom to call him up and ask who was calling him a dickhead. Not me! Andy’s a little bit of a smarty pants but hey, kettle, I am indeed pitch black.

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