Credit Suisse First Boston’s efforts to rebuild its reputation suffered a further blow on Monday as it put Frank Quattrone, its star technology banker, on leave while it investigates his attempt to get staff to destroy documents.
CSFB acted on concerns that Mr Quattrone knew about federal and regulatory investigations into its initial public offering practices when he urged employees to clean up their files in accordance with company policy.
The document disposal instructions have led federal prosecutors to expand their criminal investigation into possible wrongdoing by Mr Quattrone and others at CSFB.
CSFB’s decision also represents a setback for its chief executive, John Mack who, soon after taking over the bank in 2001, publicly proclaimed his “complete confidence” in Mr Quattrone’s “integrity and ethics”.
The National Association of Securities Dealers told Mr Quattrone last month it planned civil charges against him over his role in research and in initial public offering allocation procedures.
CSFB, which stood by Mr Quattrone as late as Friday regarding the NASD, said on Monday it was acting in a separate matter.
It involved an e-mail on December 4 2000 from top bankers in Mr Quattrone’s technology group reminding employees to destroy documents such as notes and drafts as part of CSFB’s document retention policy.
Mr Quattrone followed that e-mail with a message of his own that said, having been a witness in a securities case in Texas, he would “strongly advise you to follow such procedures”.
People familiar with the situation said CSFB acted because it found evidence that Mr Quattrone knew it was the subject of multiple investigations when he sent his e-mail.
CSFB also said information discovered last Friday “raised questions” about whether Mr Quattrone told the truth when CSFB officials asked him last week whether he knew about pending investigations when he sent his e-mail.
Those familiar with the situation said CSFB on Friday unearthed e-mails from David Brodsky, its general counsel for the Americas, to Mr Quattrone on December 3 2000, a Sunday that mention the multiple investigations. The e-mails from Mr Brodsky were not previously divulged because they were lawyer-client communications and considered privileged.
Mr Quattrone said through a spokesman: “I did nothing wrong. I am confident the investigation will show that.”
The US attorney’s office in New York could not be reached for comment.