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Clueless Frank: didn’t get legal “mumbo-jumbo”

Oct
10
2003

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

Clearly, calmly, with humor and intelligence, Frank Quattrone took the witness stand just before lunch yesterday and began selling something he truly believes in: his innocence.

Quattrone’s testimony is a risky, all-or-nothing strategy that, after about a half-day or testimony, appeared to be paying off for his defense.

Jurors leaned forward in their chairs to hear the testimony of the man who led Credit Suisse First Boston’s high-voltage investment banking group through the Internet boom. He will be cross-examined today.

Quattrone denied that he intended to obstruct and interfere in a number of investigations of the firm.

When he sent the message endorsing an e-mail sent by subordinate Richard Char, did Quattrone “[think] about the SEC investigation or the grand jury investigation?” asked Quattrone attorney John Keker.

“No, I did not,” Quattrone repeated.

Quattrone has been charged with obstruction in connection to an e-mail he circulated within his office in December 2000 entitled “time to clean up those files.” The email was sent just days before news of several investigations of CSFB became public.

Quattrone said consistently that he did not believe that any of the investigations facing the bank by securities regulators, the SEC or the grand jury had anything to do with his investment banking division.

Instead, they concerned another part of the bank, equity — or stock — sales and trading, a division for which he had no responsibility.

“I didn’t understand much,” Quattrone said of the message he got from former CSFB counsel David Brodsky talking about the probe by the SEC enforcement division. “it was a lot of legal mumbo-jumbo.”

When Brodsky told Quattrone about the federal grand jury investigation, Quattrone said he still wasn’t worried. “This was about IPO allocations,” Quattrone said. “it was in a different division of the bank.”

He said he was further reassured because Brodsky said the matter would soon be resolved. “Mr. Brodsky said the bank hadn’t done anything wrong and he was going to explain that to the regulators.”

That, said Quattrone, is why he didn’t think of either matter when he got the “clean up” e-mail from Char.

“It was about civil litigation. I didn’t mean a grand jury or anything like that.”

Keker led Quattrone through the hour in which he forwarded Char’s e-mail to his banking group. During that time, he answered more than a dozen e-mails, ranging from questions about personal investments, deals the bank was hoping to land and relationships it was trying to build.

“I was interruption-driven,” Quattrone said of his day. “That was what my life was all about.”

But, said Quattrone, he was worried by the tone that Char took in his first draft of the e-mail, in which he warned bankers that “administrative housekeeping” done before any lawsuits are on the horizon could become “improper destruction of evidence,” once legal action began.

“I thought Mr. Char was using some inappropriate language, and e-mail is a medium that can last forever and can come back to haunt you,” Quattrone said. “I guess I was right.”

The courtroom — at that point, standing room only with prosecutors lined up against the rear wall — erupted in laughter.

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