Frank Quattrone, the investment banker who launched Credit Suisse First Boston into the forefront of the tech stock boom and was recently accused of obstructing justice, quit the firm yesterday clearly under pressure.
Quattrone is under investigation by civil and criminal authorities, including state Attorney General Eliot Spitzer’s office, for the methods he and his high-flying brokers used to boost tech stock sales in the late ’90s.
During his career, the 47-year-old master-minded a host of public offerings including Amazon, Netscape and Cisco.
He has been accused of ordering his CSFB staff to destroy E-mails implicating him in questionable allocations of many of these hot IPOs.
Quattrone, lured away from Deutsche Bank’s high-tech investment group in 1998 to run CSFB’s tech investment banking unit in Silicon Valley, was suspended by CSFB last month and faces possible banishment from the securities industry.
The brokerage had said it would “take appropriate action” if Quattrone didn’t cooperate with regulators investigating him and the firm.
Last week, Quattrone failed to appear before the National Association of Securities Dealers to answer questions about his conduct. Under NASD rules, failure to testify could lead to the ban.
In a statement yesterday, CSFB said it had agreed with Quattrone “it was in their respective best interests” for him to “separate” from the firm.
A CSFB spokeswoman declined additional comment. Quattrone’s spokesman, Bob Chlopak, said he “elected to resign.”
But a source close to the situation said Quattrone had been asked to leave. “He didn’t go to them,” the source said.
Chlopak added that “all legal and financial matters between Mr. Quattrone and CSFB” were on hold until inquiries were completed, but “we expect Mr. Quattrone to be exonerated when all the evidence is in.”
Quattrone’s resignation “does not affect our investigation,” said a spokeswoman for Spitzer.
The AG’s office is looking into whether Quattrone defrauded New York investors by pressuring stock analysts to promote certain tech stocks. It’s also alleged he and his staff selectively offered their best customers shares in tech stock initial public offerings as rewards.
A source familiar with the Spitzer investigation said Quattrone’s departure looked as if “CSFB was trying to distance itself” from him.
Last December, CSFB and 12 other brokerages settled conflict-of-interest charges with Spitzer’s office and other state attorneys general. CSFB agreed to pay $150 million in fines and $50 million to an education fund.