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Non-Tech : Auric Goldfinger's Short List -- Ignore unavailable to you. Want to Upgrade?

To: scion who wrote (11197)	3/6/2003 2:31:58 PM
From: StockDung	Read Replies (1) \| Respond to of 19428

Quattrone, Ex-CSFB Banker, Charged With `Spinning' (Update2) By Ed Leefeldt Washington, March 6 (Bloomberg) -- Frank Quattrone, who quit two days ago as Credit Suisse First Boston's chief technology banker, was charged by securities regulators with abuses tied to sales of shares in initial public offerings and analyst research. The regulators, the National Association of Securities Dealers, also charged Quattrone, 47, with failing to cooperate with their investigation. Quattrone, whose Silicon Valley office managed the most computer-related share sales at the height of the Internet boom, was the first investment banker singled out by regulators for misconduct in the late 1990s. ``In too many cases in the past, investors' interests were compromised for greater investment banking revenues,'' said Mary Schapiro, NASD's president of regulatory policy and oversight, in a statement. ``It's necessary to hold the individuals responsible for these abuses accountable.'' CSFB agreed to pay $200 million in a $1.4 billion industrywide settlement of government claims that firms' banking interests tainted advice to investors. The payment didn't protect individuals from separate charges. The firm also agreed to pay $100 million in January 2002 to settle charges related to claims it distributed shares in sought-after IPOs for kickbacks. Spokespeople for Quattrone and Credit Suisse First Boston didn't immediately return calls seeking comment. The banker, through spokesman Bob Chlopak, earlier this week denied any wrongdoing. Possible Penalties Penalties may include a fine, censure, suspension, or bar from the securities industry, and loss of gains associated with the violations, and payment of restitution, the regulators' statement said. He earned more than $200 million between August 1998 and the end of 2001, the regulators said. Specifically the NASD charged Quattrone with offering access to sought-after IPOs to selected corporate executives who could give Quattrone and CSFB future business. In a process known as ``spinning,'' Quattrone set up ``Friends of Frank'' accounts to allocate shares to 300 of them, the NASD alleged. Quattrone also intervened with analysts, whom he supervised, to issue favorable reports on prospective clients of the investment bank and used ``pitch books'' of favorable research as a selling tool, the NASD statement said. Quattrone also failed to appear for investigative testimony before the NASD on allegations that he had destroyed documents when he was advised of a Securities and Exchange Commission investigation, the NASD complaint said. Fees Quattrone's unit generated about 12 percent to 15 percent of CSFB's revenue in 1999 and 2000. Credit Suisse made $717.5 million in fees from underwriting technology IPOs in 1999 and 2000. His initial contract at Credit Suisse and an earlier one at Deutsche Bank AG promised him a share of the revenue his group generated. While his division arranged almost one initial public offering per week in 2000, his last IPO came in May 2002 for Altiris Inc. From its peak three years ago this week, the Nasdaq Composite Index has plummeted almost 75 percent. In that time, shares of Credit Suisse Group, CSFB's parent, dropped more than 60 percent. Its bigger rival, UBS AG, slid about 15 percent.