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Silicon Valley's star banker Frank Quattrone continues his comeback, with the watchdog SEC overturning a lifetime ban on him working in the securities industry.

Once again it was on a technicality.

In March 2003, the securities regulator NASD suspended the former Credit Suisse First Boston investment banker for a year, and fined him $30,000, with the threat of a lifetime ban if he failed to testify before the regulator within 12 months.

Quattrone declined to appear, pleading the Fifth Amendment. So in November 2004, after the banker's second trial on obstruction of justice charges ended with a guilty verdict, NASD extended this to a permanent ban. [PDF, 144kb]

Last week the Securities and Exchange Commission issued a partial ruling questioning the automatic extension to a lifetime ban. [PDF, 100kb] A panel found Quattrone raised a legitimate procedural question.

Quattrone still faces NASD enforcement proceedings on the central question of whether he was guilty of "spinning" - stuffing CEOs pockets with cash in the form of hot IPO stocks, in the hope of swinging them over to CFSB's brokerage business.

Last week, an appeals court overturned Quattrone custodial sentence - also on technicalities. Even though the appeals judges said that, "the evidence is sufficient to support Quattrone's conviction on each count."

Which leaves the door open for a third trial - if the Feds still have the appetite. ®

The smart choice: opportunity from uncertainty

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