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Correction to This Article
A Nov. 23 Business article incorrectly said that investment banker Frank P. Quattrone refused for 20 months to answer questions from NASD about an e-mail he had sent to subordinates. He agreed to NASD's request for sworn testimony after 15 months.

NASD Bars Ex-Banker Quattrone For Life

By Brooke A. Masters
Washington Post Staff Writer
Tuesday, November 23, 2004; Page E03

Securities industry regulators barred former investment banker Frank P. Quattrone yesterday from ever working in the securities industry again, ruling he had failed to cooperate with an official investigation.

The lifetime ban by the NASD, formerly known as the National Association of Securities Dealers, could spell the end of Quattrone's storied Wall Street career, a lucrative line of work that once netted him $120 million in a single year.


Former CSFB investment banker Frank P. Quattrone already faced a 10-year ban for obstruction.

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The bar comes on top of Quattrone's conviction and an 18-month federal prison sentence for obstructing a 2001 investigation into the way his former firm, Credit Suisse First Boston, handed out shares in hot new stock offerings.

He has appealed his conviction, which carries an automatic 10-year ban on working in the securities industry.

The case that led to the lifetime ban stemmed from Quattrone's refusal in February 2003 to answer NASD questions about a December 2000 e-mail he sent to several hundred subordinates endorsing a plan to "clean up" their files by tossing drafts and other documents.

NASD members are required to cooperate with the organization's investigations, but Quattrone refused to answer questions for 20 months, citing his Fifth Amendment right against self-incrimination since he was already facing trial on federal charges resulting from the same events. By the time he gave testimony to the NASD, he had already taken the stand twice in his own criminal trial.

The NASD hearing panel that first considered the issue recommended a one-year suspension from the industry and a $30,000 fine. But Quattrone and the NASD enforcement division were each dissatisfied with the results and appealed to the organization's National Adjudicatory Council, which handed down the lifetime ban.

"We find Quattrone's misconduct to be egregious," the 14-member council wrote in its opinion.

Quattrone's lawyer Ken Hausman said the California-based banker intends to appeal what he called "this publicity-driven decision" to the Securities and Exchange Commission.

The "decision singles out Frank Quattrone for harsher treatment than other individuals in related cases . . . [and] deprives Frank Quattrone of his Constitutional Rights," Hausman said in a statement.

NASD enforcement chief Barry R. Goldsmith praised the ruling as "very strong and well written and correct. . . . They understood the importance of getting information from the people we regulate."

The bar prohibits Quattrone from working with any firm associated with a broker-dealer, a category that includes all the major investment banks.

The NASD barred 494 people from the securities industry last year, an all-time high, and has barred 378 people so far this year, as of the end of October, spokesman Herb Perone said.


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