culture, politics, commentary, criticism

Thursday, February 27, 2003
deleteBubble Boy gets popped. Frank Quattrone, star investment banker, becomes ensnared in his own coverup (
Wall Street Journal, subscription required):
Frank Quattrone, Credit Suisse First Boston's investment-banking star, was apprised of three regulatory inquiries, including a criminal probe, into the firm's IPO practices days before he urged colleagues to purge files.

In a series of e-mails on Dec. 3, 2000, the securities firm's in-house lawyer David Brodsky informed Mr. Quattrone about the investigations into the underwriting of technology stocks by CSFB, a unit of Credit Suisse Group. The e-mails were sent two days before Mr. Quattrone, in a Dec. 5 e-mail, urged CSFB bankers to follow the advice of a CSFB banker to dispose of notes, valuation analyses and other internal memos to protect the firm against lawsuits resulting from the bursting of the technology-stock bubble.
For sales of stock worth billions of dollars, the stakes were certainly high enough (New York Post via Shepherd, Smith and Bebel PC):
Quattrone and his crew made CSFB the top underwriter of tech IPOs during the tech boom in 1999. They underwrote $6.08 billion worth of IPOs on 62 separate issues, according to Thomson Financial.

In 2000 CSFB slipped to No. 4, behind Goldman Sachs, Morgan Stanley and Deutsche Bank, with $4.72 billion and 44 separate issues.
Earlier in the same article, we get a sense of Quattrone's scope by comparing his crimes with those of Merrill Lynch:
A probe by New York Attorney General Eliot Spitzer against Merrill Lynch made public scandalous e-mails that rocked the firm, causing the stock to drop more than 25 percent and forcing Merrill to pony up $100 million and institute reforms to settle the case.

But CSFB had many more underwritings under star tech banker Frank Quattrone than Merrill did.
Now the time has come for CSFB's Frank Quattrone, Bubble Boy Extraordinaire turned Superstar Email Deleter, to pony up his share of the loot.

Merrill Lynch's $100 million fine is all well and good, and CSFB's $200 million fine or whatever it ends up being will be very nice, I'm sure, but why aren't any of these people going to enjoy some quality downtime in jail? A good working definition of class warfare would be when only the lower classes go to prison for their crimes, while the masters of Enron, Tyco, Merrill Lynch and CSFB get wrist-slapped (if anything) and fined in trivial amounts relative to the enormity of their thefts and indiscretions.

While Rome is burning, Ashcroft's Department of Justice spends our resources chasing down every last one of those deadly and destructive head shop owners and game "warez" bootleggers. Priorities!

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