Former investment banker Frank Quattrone was sentenced last night to 18 months in jail and fined $90,000 for obstructing federal probes into kickbacks involving some of the largest IPOs of the 1990s.
US District Judge Richard Owen handed down the sentence to Quattrone, 48, who was convicted in May of attempting to block grand jury and regulatory investigations by forwarding an e-mail to co-workers reminding them to "clean up" their files.
Quattrone, whose lawyers are appealing the conviction, is the most powerful securities industry executive to face jail time since junk bond king Michael Milken in the early 1990s.
A jury found that Quattrone, while at Credit Suisse First Boston in late 2000, interfered with an investigation into whether the bank had doled out shares of the most popular initial public offerings to hedge funds in exchange for kickbacks.
At issue in Quattrone's trial was whether he hampered that investigation when he endorsed a subordinate's e-mail advising staff that it was "time to clean up those files."
The prison sentence marks a dramatic fall for a financier who once earned $120 million in one year. Quattrone was one of the first bankers to foresee the technology bonanza of the 1990s.
Prosecutors charged that Quattrone sent the e-mail to his staff urging them to get rid of old files because he had been told the bank was under investigation by a grand jury.
For his part, Quattrone testified that he simply failed to connect the investigation and e-mail in his mind. He said he believed the probe involved a different division of CSFB.
Quattrone grew up in blue-collar South Philadelphia and graduated from the University of Pennsylvania's Wharton School and Stanford University's business school. He quickly rose to become a highly regarded investment banker.
First at Morgan Stanley, he helped take such companies as Cisco Systems
and Netscape Cpublic. Quattrone later moved to Deutsche Bank, and finally to CSFB in 1998.
His sentencing follows that of trendsetter Martha Stewart, who was ordered by a federal judge in the same courthouse to spend five months in prison and five months under house arrest for obstructing an unrelated securities fraud investigation.