Back on The Block

With the probably permanent set-aside of Silicon Valley banker Frank Quattrone’s conviction on obstruction of justice and witness tampering, a new era begins in Silicon Valley. One that will probably mark the full maturation of the area’s very healthy financial services business – business that doesn’t need New York.
Yes, yes, the judges have ordered a new trial. But the lawyers who prosecuted Quattrone are in private practice now. And three trials? Well, it does seem a bit much to get a man who, when it comes down to it, did nothing more than send an email. That’s particularly true now that his reasons for sending that mail can’t be implied to a jury. That’s why it’s likely that Quattrone will get a pass from the Department of Justice (NASD, the folks who regulate stock brokers are another matter and they are much less likely to be so charitable, continuing to bar Quattrone from the banking business).
UPDATE:Just goes to show what I know: The Securities and Exchange Commission has over-turned NASD’s decision to bar Quattrone. The story is here and it makes pretty much every other prediction in this column doubly-true.
But his ability to once again move and shake in Silicon Valley – look for him to join a big venture capital firm, soon – will be a continuation of the much-denounced bubble. But this isn’t the Internet v. “real” world that you hear so much about outside the valley. No, this is another important chapter in the decade-long fight between Silicon Valley’s money guys and the New York financiers. Quattrone has played a staring role in that drama. He’s sure to take center stage again.
See, Silicon Valley is not about the stock market. It’s about selling stock to the market – to reap the rewards of private investments. The valley runs one of the more remarkable private equity pools in the world. You can’t see it. Almost no one talks about. It’s taken for granted, much as the spectacular views down U.S. 280 or the foggy and damp San Francisco summers. But it’s real. Millions and billions of dollars worth of real. It sits with venture capital funds but also – almost as importantly – it sits in the hands of the many people who became very wealthy in the 1990s. (Many of those folks have, in fact, funded enterprises like this one.) They invest shrewdly and carefully in technology that many people can’t – or won’t understand. Those initial investments – pennies on the dollar – pay well for those who are careful and smart. But to get paid, they have to see the stock sold in some kind of public-market transaction. Facilitating that process was Frank Quattrone’s job; no one did it better.
The money made in the 1990s in Silicon Valley did not evaporate in the bubble. It just sat on ice for a bit. With the Google IPO it started to recirculate. This time, Silicon Valley – which has always hated the dismissive and condescending attitude that oozed from technically unsophisticated bankers from New York – is gonna get theirs. Frank Quattrone will – again – be the man to lead the charge.
Let me be very clear about this: Frank Quattrone’s talent as a banker should not be questioned. For all I have written about the man (and it’s a lot) I have never doubted his intelligence or his ability to speak for and understand his clientele of science-minded geeks. “He vibrated at the same frequency” said one his former associates. I can’t improve on that description.

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Greetings Quattrone Searchers

That loud noise you heard was the sound of a large, heavy book being thrown at Frank Quattron by a cranky, long-established federal judge. Quattrone’s gotten 18 months, according to the WSJ, longer than anyone officially anticipated. It’s a sad end to what would — greed and hubris having not gotten in the way — have been a spectacular career.
For those of you new to this site, welcome. Our normal editorial diet is business and politics from a California and Silicon Valley perspective. If you’re interested in Quattrone – and who isn’t really? – you’ll find this site fun and interesting.

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That’s All, Folks

Reading the interviews with the jurors who convicted Frank Quattrone of obstruction of justice and witness tampering you can see a bunch of important differences between this case and the last one.
First, the background noise has changed. It’s not just Martha Stewart, who proceeds Quattrone in getting a sweeping conviction. There’s a general sense of mistrust out there. Up against prosecutors who took their measure last time, Quattrone and his lawyer John Keker had more of an uphill battle than they realized. They can blame Judge Richard Owen but I don’t think that appeal will work very well.

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Stay A While

I thought gay marriage was good for business. It rocketed our numbers. But Frank’s put us through the roof. Welcome. Pull up a chair. Stay a while. For now, the topic of the day is Frank Quattrone but if you’re interested in the trial and its sad outcome, you might be interested other stuff I’m writing about: the intersection of politics and business, is one part of this ‘blog’s regular beat. How San Francisco is being changed by the culture of the self-employed is another. And, naturally, Gov. Terminator, the businessman’s politician figures large in our commentary.
To make things easy for newcomers, here’s the archive of all the straight dead-tree (newspaper) reporting I’ve done on this stuff, starting with the very very very very first – okay, I’m blushing – “friend of Frank” story that ran on Jan. 11, 2001.
Here’s the first “clean up those files” story from Jan. 30, 2003. Both pieces ran in the New York Post. The straight trial coverage from last fall also ran in the Post and has been integrated into the posts I did to the site from the trial.
I wasn’t in New York for Quatrone 2.0. But I sat through the whole first trial. And, yes, I’m pretty sure Quattrone was the first criminal defendant to get ‘blogged’ which, in its own way, is appropriate.
We’re going back to normal programming tomorrow. That’s probably going to include a look at how Gov. Terminators’ status is changing. Todays’ New York Times acknowledges that he’s a pretty good governor and compares his approach to New York Mayor Michael Bloomberg’s. If you’d been reading this ‘blog you’d know that. And there’s some stuff to say about Democratic nominee John Kerry’s economic plan. Like Schwarzenegger, he’s called on Warren Buffett. There’s more. But I’ll keep the surprises to myself.
Y’all come back now, ya hear?

Real Irony in an Ironic Age

Frank Quattrone’s second jury will begin deliberating his guilt or innocence on obstruction of justice and witness tampering charges tomorrow. Today will be given over to the usual closed-door fireworks between Judge Richard Owen and Quattrone attorney John Keker over what the judge should tell the jury.
The fireworks and excitement in this trial are mostly between the judge and the lawyer, Keker deciding that he’s had enough fun with the press. And they’ve been pretty much going off in private out of the jury’s and reporters’ sight. Last fall, we got to see Frank squirming – well, really just displaying quiet contempt — as he watched some pretty damning email show up for all to see and read. This year, it was just quiet acknowledgment.

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It’s Hard Being Right All The Time

It’s probably not exactly the story he’d like but it probably did Frank Quattrone a lot of good to see his work – his years of hard work in Silicon Valley – finally acknowledged by The New York Times on the day he’s taking the witness stand in his obstruction of justice trial. Frank is a great witness – he’s not so good on defense – but this piece will play to his strengths.
Playing catch-up (sorry boys) Mr. Sorkin and Mr. Thomas, pulled together the Google IPO and Quattrone in one story. Damn. Where, oh where, do you think they got that idea. Sorkin and Thomas offer a view from New York and they use the term digerati – a word once applied to the Times’ main man here in San Francisco – but it gives a glimpse of Quattrone’s success wresting financial control away from New York banks for his geeky brethren. It can only please Quattrone that the banks he once led still follow his lead. I sorta know how he feels.
UPDATE: For me, the term “digerati” is somewhat dated. But, it seems, Markoff himself coined it so it’s only appropriate that he gets to wear it too. Today’s theme: It’s not being right that’s hard. It’s being right all the time.

A Subtle Shift

If Andrew Ross Sorkin’s reporting in today’s New York Times is to be believed – he went a little overboard last time around reporting and poking holes in the prosecutors’ case against Silicon Valley banker Frank Quattrone – Judge Richard Owen has finally risen to the bait.

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The Possum Strategy: Playing Dumb

The flurry of activity around the trial of former Credit Suisse First Boston banker Frank Quattrone will probably die down for this week. The lawyers made their opening statements Friday and today. Now, they’ve got to have all the experts – investigators and auditors and the like – testify about what they did and when they did it. That took about three days last time around and Judge Owen doesn’t make jurors work long days or on Friday.

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