Credit Suisse First Boston lawyers quickly became concerned when influential banker Frank Quattrone urged his employees to destroy some of their documents, one of the lawyers testified Thursday.
Company lawyers corrected Quattrone two days later, telling employees that documents should not be destroyed because the bank was under government investigation, CSFB lawyer Kevin McCarthy said.
A jury will have to decide whether Quattrone intended to obstruct justice on Dec. 5, 2000, when he sent an e-mail encouraging employees to destroy some of their files -- part of routine company policy when no such probes are under way.
The government was looking into whether CSFB charged some clients higher commissions in exchange for letting them in on shares of hot dot-com-era stock offerings.
Quattrone contends that before he sent the e-mail, he was not asked to suspend the normal CSFB policy encouraging routine destruction of some documents.
He also says he knew only that the government investigation focused on allocation of initial public offerings of stock -- a part of CSFB separate from the investment bankers controlled by Quattrone.
He is on trial in Manhattan federal court facing obstruction and witness-tampering charges. The charges against him carry penalties of up to 25 years in prison, but he would likely get a far lighter sentence under federal guidelines if convicted.
McCarthy testified that CSFB lawyers were so concerned about Quattrone's e-mail that they sent an e-mail to the same recipients on Dec. 7, urging them not to destroy any files.
"We felt it was important to try to get some clarification out," said McCarthy, who was CSFB's litigation director for the Americas at the time.
Earlier Thursday, Quattrone's attorney John Keker displayed an e-mail exchange between the banker and a CSFB legal assistant in which Quattrone said he had "zero to do" with two particular stock allocations by CSFB.
The e-mail indicates Quattrone knew investigators were looking into whether CSFB did anything improper in taking those two stocks public. But the defense contends his knowledge of the investigations did not go much further.
Quattrone was paid tens of millions of dollars a year at CSFB to help the bank take companies like Netscape Communications Corp and Amazon public during the height of the dot-com boom.
A federal grand jury looked into whether CSFB accepted kickbacks from clients in exchange for letting them in on lucrative dot-com-era stock offerings. No charges were brought in that investigation.
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