Speaking in a steady voice and smiling at jurors, former influential banker Frank Quattrone insisted he was not trying to hinder federal probes when he sent a brief e-mail urging employees to destroyfiles.
Quattrone took the stand in his own defense Thursday at his closely watched obstruction-of-justice trial and said he was unaware investigators had issued broad requests for documents from his bank, Credit Suisse First Boston.
On Dec. 5, 2000, Quattrone endorsed and forwarded a subordinate’s e-mail urging employees to “clean up those files.” Bank policy required destruction of some files – unless workers knew of lawsuits or subpoenas.
“I was simply seconding or encouraging people to follow the document retention policy,” he testified.
Later, his attorney, John W. Keker, asked: “Were you thinking about a desire to corruptly cause people to destroy documents called for by the grand jury and the SEC?”
“Absolutely not,” Quattrone replied.
In an attempt to show Quattrone was doing nothing abnormal, the defense attorney handed him a sheaf of printouts of the more than 200 e-mails he sent and received that day.
Quattrone was calm and genial on the stand, even laughing at himself when he reflected on how busy he was in 1999 and 2000, during the height of Internet stock mania.
He was to return Friday for more questioning from his own attorneys – and then grilling by government prosecutors who say Quattrone knew the extent of the investigations and deliberately tried to block them.
The investigators were looking into whether CSFB accepted kickbacks from some clients in exchange for letting them buy shares of hot initial public offerings.
The probe closed in 2001 with no criminal charges brought, and CSFB paid $100 million to settle civil charges without admitting wrongdoing.
On the stand, Quattrone reflected on a call earlier on Dec. 5, 2000, from CSFB lawyer David Brodsky, who urged Quattrone to get his own lawyer because he was a possible witness in the SEC investigation.
But Quattrone testified he was not alarmed because the investigation was limited to how stock shares were doled out by CSFB – not the rest of the bank’s role in taking companies public.
“He said it was about hedge funds, commissions and allocation – none of which has anything to do with tech files,” Quattrone said. He was head of CSFB’s Technology Group in 2000.
Earlier in the day, the defense called two character witnesses, including Rosario Lamberto, who said he had known Quattrone since they were first-graders and called him ethical and “straightforward morally.”
“I would literally place my life and the lives of my wife and children in his hands,” Lamberto said.
Quattrone was among the most influential bankers during the late 1990s, helping take companies like Amazon.com and Netscape Communications Corp. public. He earned $120 million in his top year at CSFB.
Quattrone is charged with obstruction of justice and witness tampering. The charges carry a potential prison sentence of up to 25 years, but he would likely get far less under federal sentencing guidelines if convicted.
The Quattrone subordinate who sent the original e-mail urging employees to get rid of some files was Richard Char. On Dec. 4, 2000, Char suggested the idea to his superiors, he wrote: “Today, it’s administrative housekeeping. In January, it could be improper destruction of evidence.”
Quattrone wrote back: “You shouldn’t make jokes like that on e-mail!”
On the witness stand Thursday, Quattrone was asked what he meant by the response.
“I thought that Mr. Char was using some inappropriate language. E-mail is a medium that lasts forever and can come back to bite you. I guess I was right about that,” he said, to mild laughter in the courtroom.
