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All Over But the Shouting

Oct
25
2003

There is no way anyone who has sat in the courtroom with him over the past four weeks can’t feel a mixture of both admiration and sympathy for Frank Quattrone.
Sitting and hearing testimony had to have been bad enough. But these past two weeks of waiting around for a verdict have to have been some kind of hell that not even the steady concern and faith of his closest friends Bill Brady and George Boutros sitting in the courtroom almost every day could dispel. Quattrone has artic sangfroid – the French for ‘cold blood’ – and it is a wonder to watch. I have always thought he was smart, cool and graceful under pressure. I had no idea.
So it’s not fun to say – for anyone – that there will be a second trial. Quattrone has not won a clear victory. And he has two more fights on his hands in addition to his second criminal trial: Eliot Spitzer’s on the warpath. And the NASD will have a hearing on its charges against Quattrone by the end of the year.
Quattrone’s jury couldn’t decide whether he was guilty or not. They started out voting six to five to acquit. They ended up at 8 to 3 to convict. Oh, and by the way, while the word ‘innocent’ is used by defense attorneys a great deal, it has no place in the law.
The government didn’t make its case, one juror told a gaggle of reporters. Actually it was a polite but large – and growing by the minute — pack of cameras, tape recorders, notebooks and microphones all squeezed around a heavy-set guy named Mayo who was nice enough to stop and answer the same bazillion questions over and over again. You got the feeling that he was, indeed, a nice man. And nice guys, well, there aren’t a lot of them in investment banking.
The Quattrone non-verdict verdict is the perfect ambiguous pause in the story of a man who is seen as both a genius and a criminal, a man without whom there would be no Netscape, no Cisco, no Tivo, no Amazon, no MP3. But who also unleashed Fogdog, Razorfish, Phone.com and Autoweb (yup – that little deal that became a huge pain was a CSFB offering). The jury couldn’t decide if Quattrone was a saint or a sinner. They’re not the only ones.
One thing is for sure, with his grudging concession that, on occasion he was involved, consulted and knew about IPO allocations, Quattrone’s reputation and that of his spin doctors has taken a serious hit. More importantly, this trial has shown the outlines of the money machine he created. Finally people outside the valley are getting a closer look. And they’re beginning to understand just how finely tuned this creation was.
The New York Times’ Floyd Norris finally – and I do mean finally – catches on to some of what Quattrone did, repeating for New Yorkers what most of Silicon Valley knows about Quattrone. And that doesn’t bode well for Quattrone’s next trial. Or the looming fights with the New York Attorney General or the NASD. The more they know, the smarter they’ll get. The game may be changing.
Norris’ column is a day late and well, more than a dollar short. If you’ve been reading this ‘blog, or this writer, there’s precious little that’s new there. But what appears in the New York Times set the agenda for the way the country’s most influential people think. And with the Norris piece, more people will be thinking about Silicon Valley as a “money machine.” That gap between the East and West coast just got a little narrower.
That’s why Friday’s FT’s story on Google – that it expects to hold a “Dutch” auction IPO with share price set by true demand, not some gigged up estimate by a bunch of guys in French cuff shirts all clamoring to take their seven percent off the table – is an important sign.
The guys behind Google – some of the same crowd that brought you Netscape – can read the political winds. And they’re blowing strong.

Share  Posted by Chris Nolan at 11:52 AM | Permalink

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