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Former CSFB star charged by US regulators

CSFB is facing intense legal pressure including millions of dollars-worth of fines Keystone Archive

Former star banker Frank Quattrone has been charged by the United States National Association of Security Dealers (NASD) for violating trading regulations.

He resigned from Credit Suisse First Boston (CSFB) earlier this week amid mounting legal pressure surrounding him and the firm.

On Thursday, the NASD charged Quattrone with tipping off clients about forthcoming initial public offerings in order to win business.

The former head of CSFB’s technology unit was also accused of overseeing a flawed organisation that undermined the objectivity of research analysts.

In a separate complaint, the NASD claimed that Quattrone had failed to cooperate with its probe into whether he encouraged CSFB employees to “clean up files” after being notified that he was under investigation in December 2000.


Forty-seven-year-old Quattrone successfully ran CSFB’s global technology group during the late 1990s dot-com craze, making CSFB one of the most lucrative underwriters in the history of Wall Street.

However, he was suspended last month amid ongoing investigations into the events of December 2000, conducted by New York Attorney General Eliot Spitzer.

He is also reportedly being investigated by the Manhattan US Attorney’s Office.

On Tuesday, Quattrone asserted that the firm’s legal department was responsible for his troubles, saying he was never told to stop adhering to a company policy that allows for documents to be destroyed.

On December 5, 2000, he sent an e-mail entitled “time to clean up those files”. But sources close to the matter say he had been informed of the investigation two days earlier.

Fines galore

CSFB – Credit Suisse Group’s investment arm – is facing fines of up to $150 million (SFr199 million) in the United States for allegedly misleading investors.

The fine is part of a landmark $1.5 billion settlement between 12 banks and the Securities and Exchange Commission aimed at curbing potential stock research and IPO allocation abuses.

The settlement came as a blow to CSFB, which is facing major financial problems.

In January 2002, the bank paid out $100 million to settle an earlier investigation over allegedly mishandling stock offerings between April 1999 and June 2000.

CSFB is also facing a fine of $2 million after state regulators in Massachusetts accused it of misleading investors by issuing biased research.

And if that was not enough, last December, CSFB was hit with a record $6.4 million fine by Britain’s financial watchdog for allegedly trying to mislead Japanese regulatory and tax authorities between 1995 and 1998.

swissinfo with agencies

US regulators have filed two complaints against former CSFB banking guru, Frank Quattrone.

Quattrone resigned from CSFB on Tuesday. He received no immediate compensation or severance package in connection with his exit.

CSFB suspended him in February for questionable conduct related to an earlier investigation of an IPO.

He became known for running CSFB’s global technology group during the dot-com craze with spectacular success.

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SWI - a branch of Swiss Broadcasting Corporation SRG SSR