Wednesday, July 13, 2005
The appeal by former CSFB investment banker Frank Quattrone of his obstruction and witness tampering convictions was argued before a panel of the Second Circuit on July 12, and reports indicate that the judges have substantial concerns about the jury instructions given by U.S. District Judge Richard Owen and possible prosecutorial misconduct. Quattrone was convicted largely on the basis of an e-mail he forwarded to other CSFB bankers reminding them to "clean up" their files while the SEC was undertaking an investigation of the firm related to its investment banking and IPO share distribution activities. A New York Times article (here) indicates that Circuit Judge Richard Wesley said to David Anders, the lead prosecutor on the case, ""Every good trial lawyer seems to push the envelope . . . You really blew the side of the envelope out, didn't you?" I suspect that's a rhetorical question, and certainly not an easy one to answer on the fly.
The judge's instructions on the obstruction counts, particularly the requirement to find a "corrupt" intent, will be subject to particular scrutiny because of the reversal of the Arthur Andersen conviction by the Supreme Court on essentially the same ground. Each count of the indictment (here) requires proof that Quattrone acted corruptly, a notoriously difficult term for courts to define properly in jury instructions. Unlike the Andersen trial, however, was the jury's assessment of Quattrone's credibility (or lack thereof) that may lend some support to the verdict because appellate court's are reluctant to overturn a verdict based on a jury's determination of the veracity of a witness, particularly the defendant whose state of mind is the key question -- recall that Quattrone testified in both trials (the first ended in a mistrial due to jury deadlock). If the conviction is reversed due to faulty jury instructions, the government will likely have to confront the question of whether to try Quattrone a third time. (ph)