Friday, June 02, 2006

NASD DROPS CHARGES -- This is a significant development in a case that has been dragging on for some time:

Frank P. Quattrone, the most prominent banker in Silicon Valley during the 1990's technology boom, won a third major legal battle yesterday as securities industry regulators dropped all charges against him.

The decision comes just two months after a federal appeals court overturned his conviction on charges of obstruction of justice and the Securities and Exchange Commission reversed a decision to ban him for life from the securities industry.

If prosecutors decide against retrying Mr. Quattrone, speculation is already rife that he could return to deal making in the Valley, where he helped companies like Cisco Systems and go public.

Yesterday's decision by NASD, which polices the brokerage industry, to dismiss its own case is notable because it was the accusations in the case — that he illegally doled out hot initial public offerings to corporate clients in exchange for business — that prosecutors later cited in his criminal trial to suggest that he was trying to cover up that activity and obstruct justice.

The dismissal is also notable because Mr. Quattrone's former firm, Credit Suisse First Boston, now Credit Suisse, paid $100 million to settle similar charges against the firm with the NASD in 2002.

Still, Mr. Quattrone faces the possibility that prosecutors could bring the obstruction of justice case against him again. But some legal experts suggested that with the dismissal of the NASD's 2003 case, momentum might be building for the criminal case to be extinguished, too.