Friends of Frank: The US Legal System
Frank Quatrone, former head of CSFB’s tech IPO unit, has been proven innocent after four years trying to clear his name. He was originally charged because he dolled out shares of hot IPO companies that ‘popped’ to curry favor with other Internet execs and clients. Who then usually promptly sold those shares at the end of day 1 of owning them.
Personally, I had nothing wrong with it. Perhaps Frank institutionalized the process too much, but to think that the world operates in any different way is naive. Particularly for a service-based business like Investment Banking.
Frank is now allowed back in the securities industry. Shame for him that hedge funds and private equity ballooned and blossomed over those same four years and those that rely on cheap credit to leverage up investments have choppier days ahead. He’ll have to find something else to specialize in.
Either way, it is a fascinating case and one covered in excellent detail by Chris Nolan over the years.
