Frank Quattrone: Comeback Kid

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Frank Quattrone Stephen Chernin/Getty Images

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After Credit Suisse fell under investigation for its IPO allocation practices, Quattrone reminded colleagues of a company mandate to "clean up" files, resulting in 2003 obstruction-of-justice charges by federal authorities. An initial trial ended in a hung jury. Quattrone was convicted in 2004 in a second trial, but the conviction was overturned on appeal in March, 2006. Within days, the Securities and Exchange Commission overturned a ruling that banned Quattrone from the securities industry for life. A deferred prosecution agreement (BusinessWeek.com, 8/22/06) in August of that year precluded a third trial, and obstruction charges were dropped a year later, in August, 2007.

As he attempts his comeback, Quattrone is positioning Qatalyst as a "boutique" investment bank that can offer tech-industry clients tailored advice without juggling a range of financial services, according to a statement from the company. "In Silicon Valley, it will be warmly embraced," says Lise Buyer, principal of IPO advisory firm Class V Group, who worked with Quattrone at Deutsche Morgan Grenfell and Credit Suisse from 1997 to 2000. "In this marketplace, the investment banks have a lot of balls in the air, and there are advantages to working with someone who's not distracted."

California Dreaming

Quattrone's contacts database is also chock full of some of the most powerful people in tech, including Google (GOOG) CEO Eric Schmidt, Accel Partners' Jim Breyer, and Intuit (INTU) Chairman Bill Campbell. In a press release, each was quoted as saying he looks forward to working again with Quattrone. "The fun of it for him has to be strategic M&A, and that's where he can leverage his contacts most effectively," adds Buyer.

Qatalyst is getting off the ground as the technology M&A and IPO market continue their ascent from the doldrums that followed the crash of the dot-com companies in 2001. Companies paid a median value of $97.5 million for U.S. venture-backed firms they acquired in 2007, compared with $24 million in 2003, according to market researcher Dow Jones VentureSource (NWS). IPOs by venture-backed firms in the U.S. raised $7.4 billion in 2007, vs. $1.45 billion in 2003.

To assist in the comeback, Quattrone recruited former colleagues, including Jonathan Turner, the former head of Credit Suisse's Internet group, and Adrian Dollard, a former general counsel in the firm's technology group. Other Qatalyst founders include Neil Chalasani, a vice-president from Evercore Partners (EVR); Brian Slingerland, a Goldman Sachs (GS) banker; and Brian Cayne, an associate from buyout firm Vista Equity Partners.

Quattrone will need the team's combined firepower as he tries to recover his golden touch after a years-long absence from finance and efface the tarnish of his indictment. Better to set up shop in California, where his dealmaking left an indelible mark on the tech landscape, Buyer says. "Generally speaking, most folks are glad to see him," she says. "It might be a tougher battle if he were setting up shop in New York."

Ricadela is a writer for BusinessWeek.com in Silicon Valley.