Sweetener Quattrone gets Google IPO sweetener

Nice little earner

By Andrew Orlowski in San Francisco • Get more from this author

Posted in Financial News, 29th April 2004 04:50 GMT

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While you may have cheered on Google Inc. for many years, the chances of you being rewarded in its anticipated IPO are very slim indeed. Although the company has been urged to experiment with a more "democratic" mechanism of share placement, some things never change.

Gary Rivlin, in a New York Times piece entitled Google Goes Public? The Rich Gets Richer, explains that investors already rewarded with stock include Arnold Schwarzenegger and Henry Kissinger. We're told that the trickle-down effect of this largesse will "energize" a depressed Silicon Valley, although it's unclear whether this will benefit many outside the yacht industry. However the "Who's Who of Silicon Valley insiders" offered sweeteners also includes one stand-out name: Frank Quattrone.

Quattrone is currently on trial under charges of obstruction of justice and destroying evidence. An earlier trial collapsed after the jury couldn't agree a verdict, Quattrone received a mild-slap from NASD, the securities industry's (self-) regulator. Quattrone had helped take Amazon.com public, and at the height of his popularity at Credit Suisse First Boston, Quattrone ensured that CSFB's payola analyst coverage - the ratings given to companies - was sweetened by the companies' loyalty to CSFB's banking business. An essential part of this was "spinning": the allocation of hot IPO shares to his tech CEO chums. Once again, Quattrone who emerged from the largest loss of wealth in human history with a $120 million fortune, is pleading innocent. He has expressed no word that the business he was involved in was unethical or misled ordinary investors, many of whom lost significant savings.

Coincidentally, Google Inc. this week appointed Quattrone's old firm of Credit Suisse First Boston as underwriters. His trial continues. ®