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According to Reuters, a federal judge has accepted a "settlement" between prosecutors and Frank Quattrone that provides for twelve months of deferred adjudication. This is the final footnote in a three-year odyssey for Quattrone, whose first trial in 2003 ended in a mistrail. His second trial ended in a conviction, which was overturned by the Second Circuit. The settlement today avoids a third trial. For those of you new to the Quattrone odyssey or those of you who have understandably forgotten how this case started, Quattrone was a celebrated analyst at Credit Suisse First Boston in the technology sector during the technology boom. For a short time in 2002-03, investigators were interested in whether fancy firms were spinning shares in hot IPOs. Now, it's not clear that under NASD rules at the time that spinning was prohibited. (Spinning for an exorbitant fee or other remuneration was clearly prohibited, but not spinning for "softer" considerations.) In the course of investigating CSFB and Quattrone, investigators read an email in which Quattrone reminded others of the document retention policy at CSFB. The obstruction of justice charge was born. This was the sole charge in question in both of Quattrone's trials. Did Quattrone remind employees of the document retention policy in violation of the obstruction of justice statute in an effort to cover up evidence of an act that may or may not be a crime?

And so, we'll never know if spinning in the early 2000s was a crime. (The NASD and SEC have foregone an opportunity to clear that up in new rules issued as a result of the IPO Advisory Committee.) If we had gotten some finality on Quattrone's case, the benefit would seem to be only that companies would know how to better craft document retention policies. Oh, and the prosecutors involved in his conviction did get fancy new jobs at Wachtell and others for big bucks. I guess that's a benefit. I would like to know what the total cost of prosecuting Frank Quattrone was, so we would know if it was worth it.

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According to Reuters, a federal judge has accepted a "settlement" between prosecutors and Frank Quattrone that provides for twelve months of deferred adjudication. This is the final footnote in a three-year odyssey for Quattrone, whose first trial in 2003 ended in a mistrail. His second trial ended in a conviction, which was overturned by the Second Circuit. The settlement today avoids a third trial. For those of you new to the Quattrone odyssey or those of you who have understandably forgotten how this case started, Quattrone was a celebrated analyst at Credit Suisse First Boston in the technology sector during the technology boom. For a short time in 2002-03, investigators were interested in whether fancy firms were spinning shares in hot IPOs. Now, it's not clear that under NASD rules at the time that spinning was prohibited. (Spinning for an exorbitant fee or other remuneration was clearly prohibited, but not spinning for "softer" considerations.) In the course of investigating CSFB and Quattrone, investigators read an email in which Quattrone reminded others of the document retention policy at CSFB. The obstruction of justice charge was born. This was the sole charge in question in both of Quattrone's trials. Did Quattrone remind employees of the document retention policy in violation of the obstruction of justice statute in an effort to cover up evidence of an act that may or may not be a crime?

And so, we'll never know if spinning in the early 2000s was a crime. (The NASD and SEC have foregone an opportunity to clear that up in new rules issued as a result of the IPO Advisory Committee.) If we had gotten some finality on Quattrone's case, the benefit would seem to be only that companies would know how to better craft document retention policies. Oh, and the prosecutors involved in his conviction did get fancy new jobs at Wachtell and others for big bucks. I guess that's a benefit. I would like to know what the total cost of prosecuting Frank Quattrone was, so we would know if it was worth it.

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