A key government witness testified Friday that he informed banker Frank Quattrone about a grand-jury subpoena two days before Mr. Quattrone sent an e-mail encouraging employees to destroy documents.
David Brodsky, who served as regional general counsel for Credit Suisse First Boston Corp., said he alerted Mr. Quattrone via e-mail messages on Dec. 3, 2000, that federal prosecutors had launched a criminal probe into the way CSFB doled out shares of hot initial public offerings during the Internet boom.
Mr. Quattrone went on trial Monday in Manhattan federal court on charges he obstructed that probe by sending the Dec. 5, 2000, e-mail message with the file cleaning advice to his staff. Mr. Quattrone, who served as head of CSFB’s technology group, also is charged with obstructing a related Securities and Exchange Commission investigation, and witness tampering.
Mr. Brodsky, who pointed to Mr. Quattrone to identify him, testified that he advised Mr. Quattrone in a Dec. 5, 2000, telephone conversation to retain his own lawyer, as Mr. Quattrone would likely be interviewed by the Manhattan U.S. attorney’s office and the SEC. The phone call took place several hours before Mr. Quattrone sent his now infamous e-mail, according to records introduced by Assistant U.S. Attorney David Anders.
Mr. Quattrone’s defense has maintained that the banker thought the government’s investigation pertained only to IPO allocations in the sales division and wasn’t connected to his investment-banking business.
Mr. Quattrone’s lawyer John Keker will likely further question Mr. Brodsky about his e-mail messages and conversations with Mr. Quattrone during cross- examination next week. The trial, which began Monday before U.S. District Judge Richard Owen, ended early Friday and won’t be in session Monday because of the Jewish holiday of Yom Kippur.
After jurors left for the day, Mr. Keker told reporters he was annoyed that prosecutors questioned Mr. Brodsky about Mr. Quattrone’s compensation, which was flashed on an overhead screen during the testimony. Mr. Quattrone made $38.2 million in 1999 and $120.3 million in 2000 in total compensation, part of which was paid in stock of CSFB’s parent, Credit Suisse Group.
Mr. Keker called the salary information a “ploy and a cheap shot,” perhaps because it might influence jurors to think less of an executive who is clearly well-paid.
Mr. Quattrone’s spokesman Bob Chlopak said prosecutors could be trying to impress jurors that Mr. Quattrone urged file-cleaning because he wanted to maintain Credit Suisse’s reputation and stock price, as his compensation was in part tied to that. But Mr. Chlopak downplayed any suggestion that money could be a motive, noting that Mr. Quattrone already was a “wealthy man” when the federal probes began.
Mr. Quattrone, who has often talked to supporters during court breaks, declined to comment to reporters as he left the courtroom. “I’m not going to say anything until the end of the trial,” he said. He could face roughly two years in prison if convicted of the charges.
Other testimony Friday came from Linda Jackson, who served as a vice president in CSFB’s Palo Alto, Calif., office between January 2000 and October 2002 after a stint on the 1996 Olympics cycling team.
She recalled receiving a Dec. 4, 2000, e-mail message from Mr. Quattrone’s subordinate, Richard Char, that outlined CSFB’s file-cleaning policy, and Mr. Quattrone’s Dec. 5, 2000, message that endorsed Mr. Char’s e-mail.
When asked by Mr. Anders, the prosecutor, about what she did when she received the e-mails, Ms. Jackson said: “I started to clean out my files,” she said. “I primarily went through my hard copy (and) threw out notes.”
Ms. Jackson said she stopped when CSFB’s legal department sent messages later in the week instructing employees not to heed Mr. Char’s and Mr. Quattrone’s advice.