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Frank Quattrone reached a deal with the government Tuesday that will spare him a third criminal trial and allow him to resume his lucrative investment banking career. Under a deferred prosecution agreement approved by Southern District of New York Judge George B. Daniels, Quattrone was not forced to admit any wrongdoing, serve jail time or pay a fine. The charges against him will be dropped in one year if he complies with the rules and conditions of the agreement. Quattrone must refrain from committing any crimes and “associate only with law-abiding persons.” He is required to report to a U.S. pretrial services officer and follow her “instructions and advice.” “I’ve never seen a better deferred prosecution agreement,” said James D. Wareham, a partner and chairman of global litigation at Paul, Hastings, Janofsky & Walker, who is not involved in the case. “If he is not admitting to a set of facts constituting a crime, then this is an unusual agreement.” An ebullient Quattrone smiled as he left the courtroom and hugged everyone within reach. He said he was “very pleased that the case will be concluded.” “I look forward to the formal dismissal of all charges,” added Quattrone, a former star at what was known as Credit Suisse First Boston who at one time earned $100 million a year for guiding initial public offerings for high-technology companies during the dot.com boom. In a written statement released later in the day, Quattrone said he planned to resume his business career while continuing his board service at the Innocence Project of the Benjamin N. Cardozo School of Law and the Tech Museum of Innovation in San Jose, Calif. He thanked “all of you who stood by me during the past four years. God bless you all.” The government had little to say. “A deferred prosecution of the case against Frank Quattrone is an appropriate resolution of the case in light of all of the facts and circumstances and the posture of the case at this time,” Southern District U.S. Attorney Michael J. Garcia said in statement. James Comey was the U.S. Attorney in May 2003 when Quattrone was indicted on charges of obstruction of justice, obstruction of agency proceedings and witness tampering. The National Association of Securities Dealers began investigating in 2000 how Credit Suisse conducted its underwriting of initial public offerings. Inquiries by the Securities and Exchange Commission and a federal grand jury soon followed, but no charges were actually filed against the company itself. Prosecutors accused Quattrone of encouraging a subordinate in a December 2000 e-mail to “clean up files” as the government began looking into how his company allocated stock options. A jury was unable to reach a verdict at Quattrone’s first trial, and a hung jury was declared in October 2003. A second jury convicted him of obstructing justice in May 2004. In September 2004, he was sentenced to 1 1/2 years in prison, 2 years probation and fined $90,000. He was free on bail pending appeal when the 2nd U.S. Circuit Court of Appeals overturned his conviction in March of this year. 2nd Circuit Judges Richard C. Wesley, Peter W. Hall, and Northern District of New York Judge Frederick J. Scullin Jr., sitting by designation, held that Southern District Judge Richard Owen had failed to properly instruct the jury in connection with the obstruction of justice and witness tampering charges. It also removed Owen from the case. Quattrone always maintained his innocence. He testified at trial that he was just following company policy by ordering colleagues to clean up their files, and claimed that he knew very little about the grand jury investigations into his company’s practices. After his conviction in the second trial, Quattrone was barred from working in the securities industry. Four days after the 2nd Circuit decision, however, regulators overturned this lifetime ban. By ruling that there had been sufficient evidence to indict Quattrone, the 2nd Circuit left the door open to prosecutors to try the case against him a third time. But in the letter to him setting forth the deferred prosecution agreement, the government said that “after a thorough investigation it has been determined that the interest of the United States and your own interest would be best be served by deferring prosecution.” There has been widespread speculation that Quattrone would establish a boutique high-tech advisory and private equity firm on the West Coast. Wareham of Paul Hastings said that it was unlikely that Quattrone would return to a major investment organization, as many of these companies have strict hiring guidelines that could prevent them from employing an individual who was subject to a non-prosecution agreement. Mark F. Pomerantz and Theodore V. Wells Jr., partners at Paul, Weiss, Rifkind, Wharton & Garrison, represented Quattrone. Pomerantz declined to comment; Wells did not return calls. Along with Garcia, Assistant U.S. Attorneys William F. Johnson and Raymond J. Lohier represented the government in reaching the agreement.

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