Park & Halpern

[BullNBear52]

Quattrone's Case Ends in Mistrial
By Paul Thomasch

NEW YORK (Reuters) - A mistrial was declared in the criminal case of Frank Quattrone on Friday after jurors failed to decide whether the one-time star banker tried to obstruct federal investigations into how some of biggest stock offerings in history were allocated to investors.

Quattrone, a mustachioed 48-year-old who is the most powerful financial figure in years to face criminal trial, showed little emotion when the mistrial was announced.


While he declined to comment, his attorney said the defense was unhappy with the outcome.


"We are disappointed because Frank Quattrone is innocent," John Keker said. "Frank Quattrone is a man of integrity, a man who followed the rules."


The U.S. Attorney's office, which brought both the Quattrone and Martha Stewart (news - web sites) cases, said no decision had been made on whether there would be another trial to decide if Quattrone obstructed justice by ordering staff at his former bank, Credit Suisse First Boston, to destroy documents.


U.S. District Judge Richard Owen began the 18th day of the trial by urging jurors to deliberate for "a couple of hours" to try to break the deadlock in the case. The jury of six men and five women previously sent the court two notes -- the most recent one coming late Thursday -- saying they were unable to reach a verdict.


The mistrial was declared just after 12:30 EDT (1630 GMT).


"Everybody had a strong belief in their position," juror Mayo Villalona said after court was adjourned.


In the final count, eight jurors found Quattrone guilty of obstructing a grand jury investigation; five found him guilty of obstructing an investigation by the Securities and Exchange Commission (news - web sites); and eight found him guilty of witness tampering, according to Villalona.


"EVASIVE" WITNESS


Quattrone, accompanied by a pack of friends and family during the trial, was among the first bankers to see the coming technology bonanza and once generated so much revenue and buzz he had his own press team.


But by late 2000, the market for hot stock offerings had dried up, and investigators began looking at whether shares of the most popular initial public offerings had been doled out to hedge funds in exchange for kickbacks.


As the SEC and a federal grand jury were investigating whether CSFB unfairly allocated shares, Quattrone forwarded an e-mail written by a subordinate that ordered staff to "clean up" their files. Quattrone has said he was unaware that investigators had subpoenaed anything in CSFB's investment banking records when he forwarded the e-mail.


Hoping to use the charm that once earned him more than $120 million in salary and bonus to make his case, Quattrone took the witness stand during the trial's second week.


But juror Villalona, who voted not guilty on all charges, said Quattrone's testimony hurt his chances for acquittal.


"If he would not have been sitting up there, he would have been found not guilty in two minutes," said Villalona, who said the financier seemed "evasive" during cross examination.


Under questioning by the prosecution Quattrone was forced to admit he played a role in the allocation of hot stocks at CSFB, backtracking on earlier testimony.





On several other occasions during his cross examination, he parsed words with Assistant U.S. Attorney Steven Peikin, said his recollection was unclear and asked that the question be read back to him by the court reporter.

At one point during the testimony, Peikin said "I don't want to argue with you. I just want to ask you a question."

Quattrone may hold up better the second time around, if the prosecution decides to bring the case again. For starters, said legal experts, he may be able to concede under friendly direct examination that he played some role in allocations.

U.S. prosecutors would be stuck trying to prove that Quattrone intended to obstruct the investigations when he forwarded one e-mail.

"There was no hard evidence," said Villalona. "If there is more evidence, they have to bring it."

Judge Owen set a Nov. 5 status conference to determine how the case will proceed.

http://story.news.yahoo.com/news?tmpl=story&cid=568&e=3&u=/nm/20031024/bs_nm/crime_quatt...