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Deal clears path for Quattrone to reconstruct banking career
San Jose Mercury News
SAN JOSE, Calif. — Silicon Valley's storied financier, Frank Quattrone, won a deal from prosecutors in a New York courtroom Tuesday that means an end to his legal troubles, clearing the way for him to return to the investment-banking career that had made him one of Wall Street's most powerful technology bankers.
The deal is vindication for a man who once faced an 18-month prison term for his conviction, later set aside, for obstruction of justice, as well as a "lifetime ban" from working in the securities industry.
For days, since the deal was reported imminent, Quattrone's legal victory has had valley insiders asking whether the former top investment banker can make a triumphant comeback.
"I plan to resume my business career," Quattrone said in a statement issued after the agreement was finalized in the federal courthouse in Lower Manhattan. He said he was "very pleased that the case will be concluded" and looked forward to dismissal of charges.
Some of Silicon Valley's business leaders said they were ready for his return.
"I would hope that he would," said Dick Kramlich, general partner of New Enterprise Associates in Menlo Park, a leading venture-capital firm. Kramlich said New Enterprise did about 20 deals with Quattrone. He said he saw no reason to think Quattrone's legal odyssey would leave a stigma.
As for whether Silicon Valley would welcome Quattrone back, Kramlich said, "I can only speak for ourselves. We certainly would."
"I think he can do whatever he wants to do," said Bill Burnham, a venture capitalist who worked under Quattrone at Credit Suisse First Boston and considers him a friend. "Out here in Silicon Valley, I don't think there's anybody who is not going to welcome him with open arms, and there's a tremendous amount of sympathy."
The deal reached Tuesday was a "deferred-prosecution agreement" that allows his criminal case to be dismissed without a third trial. Quattrone is required only to refrain from violating any laws and from associating with any lawbreakers for a 12-month period.
He also has to notify the government if he moves from his Los Altos Hills, Calif., home.
"Quattrone has received the same punishment as someone who smuggled a few Cuban cigars into the United States," said Timothy Coleman, co-chairman of Dewey Ballantine's white-collar crime practice. "If he holds up his end of the deal, it will be as if the case never happened."
The pact would conclude a three-year effort to prosecute a man who earned $100 million in one peak year at the height of the technology boom as he commanded his former investment firm's technology portfolio.
Tuesday's statement was the first indication Quattrone has given of his future plans. The goodwill that remains in Silicon Valley has many speculating he could resurrect himself as a brand-name Silicon Valley player, perhaps in a boutique investment house.
It's a dramatic turnaround from the accusations that hung over Quattrone in 2003, when he faced criminal charges of obstructing justice for forwarding an e-mail urging co-workers to "clean up" their files.
Industry regulators also accused him of violating banking rules against gifts and gratuities by doling out stock to business associates in hot startups before their initial public offerings.
The list of business associates became known as "Friends of Frank," although Quattrone's attorneys say his role was minimal and that he did not know most of the recipients.
Quattrone, at 50, is wealthy enough to lead a life dedicated to family, his golf handicap and his philanthropic pursuits, including the Northern California Innocence Project at the Santa Clara University Law School, a nonprofit that researches questionable criminal convictions.
Before the deferred-prosecution agreement, Quattrone had also won an appeal setting aside his conviction, and also a 5-0 decision from the Securities and Exchange Commission that erased a lifetime ban imposed by the National Association of Securities Dealers.
The NASD had banned him for refusing to testify while his criminal case was proceeding, which his lawyers had advised him against. The SEC later agreed Quattrone could legitimately take the Fifth Amendment, and the NASD later dropped its charges.
Copyright © 2006 The Seattle Times Company