FRANK QUATTRONE, the former star investment banker, was granted a retrial by the US Court of Appeals yesterday after it threw out his 2004 conviction for obstructing justice.

A three-judge panel at the federal appeals court unanimously sent the case back to the district court for a new trial and directed that the case be reassigned to a new judge, citing erroneous jury instructions.

The decision will be a blow for the US Government, which has pledged to fight white-collar crime and it was unclear last night if a third trial against Mr Quattrone would be pursued.

Megan Gaffney, a spokeswoman for US Attorney Michael Garcia, said: “We are reviewing the opinion and considering our options.”

In May 2004 Mr Quattrone was sentenced to 18 months in prison after he was found guilty of witness tampering and obstructing an investigation at Credit Suisse First Boston, his former employer.

It followed revelations that he sent an e-mail to staff advising them to “clean up those files” after the bank had received a subpoena from investigators demanding company documents.

The prosecutors claimed that the e-mail was an order by Mr Quattrone, once one of Wall Street’s highest-paid bankers, for his staff to destroy files that might have been needed for the government investigation into the “hot IPO” case.

An earlier case regarding the same charges collapsed with a hung jury in 2003.

On appeal Mr Quattrone’s lawyers had argued that the second trial was rife with errors, including district judge Richard Owen’s failure to tell the jury that the banker could be convicted only if he tried to cause the destruction of documents he knew to be covered by subpoena.

In a 61-page opinion, US Appeals Court Judge Richard Wesley said that a “rational trier of fact” could conclude that Mr Quattrone deserved to be convicted. However, the judge said: “While we . . . do not find evidence that the trial judge made any inappropriate statements leading us to seriously doubt his impartiality, portions of the transcript raise the concern that certain comments could be viewed as rising beyond mere impatience or annoyance.”

Judge Wesley said that reassigning the case to another judge would serve: “the interest and appearance of justice.”

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