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Conviction Overturned for Banking Star Quattrone

RENEE MONTAGNE, host:

In our business news today, a new trial for a man made famous during the dot-com boom.

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A federal appeals court has tossed out the conviction of star investment banker Frank Quattrone. He was convicted on obstruction of justice charges in 2004. The court said that jury had been given improper instructions.

The court also ordered the case turned over to a new judge. NPR's Jim Zarroli reports.

JIM ZARROLI reporting:

Frank Quattrone was a renowned figure in Silicon Valley during the dot-com boom--someone who helped bring some of the nation's most successful tech companies public, including Netscape and Amazon. He was convicted of trying to hinder a federal investigation into stock offerings by his company, Credit Suisse First Boston.

At the time, U.S. officials had issued a subpoena seeking certain company documents. A banker who worked in Quattrone's division sent out an email urging employees to clean out their files, and Quattrone then sent out his own email echoing the order.

In his defense, Quattrone said he didn't really understand which documents were subpoenaed by the government, and that at any rate, he never intended to interfere with the investigation. But he was sentenced to 18 months in prison, a sentence that was delayed pending an appeal. Yesterday, the Second Circuit Court of Appeals said the judge hearing the case, Richard Owen, had failed to instruct the jury properly.

John Coffee teaches securities law at Columbia University.

Professor JOHN COFFEE (Adolf A. Berle Professor of Law, Columbia Law School): The critical requirement for obstruction of justice, according to the Second Circuit, is that the defendant had to be aware that the specific documents destroyed were requested by the subpoena, and that his actions were likely to affect the proceeding.

ZARROLI: The court said the judge should have told the jury this, and because he didn't, the court ordered a new trial.

The appeals court did say that had the judge instructed the jurors correctly, it's likely they would have convicted Quattrone anyway. Coffee says that is good news for the U.S. Attorney's office, which prosecuted the case, and it increases the likelihood that U.S. officials will try the case again. If they do, the case will be heard by a new judge.

The appeals court said it didn't doubt Judge Owen's impartiality, but it said some of the comments he made during the trial could be viewed as rising beyond mere impatience or annoyance. If Quattrone is tried again, it would be for the third time. His first trial ended in a hung jury.

Jim Zarroli, NPR News, New York. Transcript provided by NPR, Copyright NPR.