A Journal for Western Man



Quattrone's Successful Appeal a

Victory against Persecution of


Dr. Edward Hudgins

Issue LIII- April 2, 2006




A three-judge federal appeals court today unanimously threw out the May, 2004, obstruction of justice conviction of financial entrepreneur and innovator Frank Quattrone. This decision is a victory against the persecutors of capitalists and a first step toward making right a serious injustice.

Quattrone's was a premier case of anti-business prosecutors who could find no misdeeds by the targets of their persecution and so, instead, indicted them for covering up a crime that they did not commit. Prosecutors could find no illegal activities such as kickbacks or fraud on the part of Quattrone. Thus, they accused him of obstruction based on several emails, sent at a time when he knew of no accusations against his division. Those e-mails merely instructed his staff to make certain that their files were in order and informed them that year’s end was the "time to clean up those files" in accordance with regular company policies.

The appeals court judges found that the original presiding judge, Richard Owen, had given the jury improper instructions. For example, he allowed the jury to convict Quattrone of obstruction "regardless of whether he intended such." A 2003 trial of Quattrone on the same charges resulted in a hung jury. Prosecutors still might retry him.

But the appeals court judgment points to the reckless nature of prosecutors who, in the wake of business scandals, look not to bring to justice real thieves but, rather, make examples of the prominent and successful because they are prominent and successful. It also points to the perversion of the law. Zealous prosecutors see any attempt to resist their twisting innocent business practices into illegal conspiracies--that is, any attempts by businessmen to refuse to acquiesce in their own martyrdom--as evidence of obstruction of justice.

Quattrone is a true American hero. His innovative financial techniques allowed him to launch initial public stock offerings for such Silicon Valley successes as Cisco Systems and Netscape as well as Amazon.com. Rather than be rewarded, he became the target of envy.

While the appeals court decision is most welcome, more producers and entrepreneurs in America must stand up for their rights and refuse to accept unearned guilt if they are to save not only themselves but also the system of free markets and rule of law that offer them and all Americans the opportunity to live in peace and prosperity.

Dr. Edward Hudgins is the Executive Director of The Objectivist Center (http://www.objectivistcenter.org) and its Atlas Society, which celebrates human achievement.

For further information:

See my September 10, 2004 op-ed, "Obstruction of Freedom," on Quattrone's sentencing: http://objectivistcenter.org/cth--951- Obstruction_Freedom.aspx

For a detailed discussion of "The Case for Frank Quattrone," see Roger Donway's piece in the July/August 2004 issue of Navigator: http://www.objectivistcenter.org/ct-939- The_Case_Frank_Quattrone.aspx

In addition, see his analysis of Quattrone's appeal in the Jan/Feb 2005 issue of The New Individualist: http://www.objectivistcenter.org/ct-1552- Quattrone_Appeals_His_Conviction.aspx

Also see his interview in the March 2005 issue of The New Individualist with Quattrone's attorney, Kenneth Hausman, about the draconian punishment imposed on Quattrone by the National Association of Securities Dealers: http://www.objectivistcenter.org/ct-1546- NASD_Punishes_Quattrone_for_Asserting_His_Rights.aspx

This TRA feature has been edited in accordance with TRA’s Statement of Policy.

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