New York ? A federal appeals court on Monday threw out the criminal conviction of Silicon Valley financier Frank Quattrone, ruling that the judge gave faulty jury instructions at Quattrone’s 2004 obstruction-of-justice trial.

The three-judge panel sent the case back to district court for retrial but, in a rare step, removed U.S. District Judge Richard Owen from the case. Quattrone’s lawyers had complained that the judge favored the prosecution.

“Justice has finally been done, and hopefully the U.S. Attorney will say enough is enough” and drop the charge, Quattrone attorney John Keker said in an interview.

The U.S. Attorney’s office in Manhattan is reviewing the opinion and has not decided how to proceed, a spokeswoman said. If prosecutors retry Quattrone, it would be his third trial. The first ended in a mistrial in October 2003.

As an investment banker for Wall Street firms, Quattrone helped shepherd the public offerings of Amazon.com Inc., Cisco Systems Inc. and other companies. He was already a star when he was hired by Credit Suisse First Boston in 1998 to run its Silicon Valley Global Technology Group. In 2000 alone, he earned $120 million.

That same year, prosecutors alleged, Quattrone sought to obstruct investigations by the Securities and Exchange Commission and a federal grand jury in New York into whether Credit Suisse First Boston forced its clients to pay kickbacks for shares in initial public offerings of stock, which were almost certain to deliver fast profits.

The key evidence was an e-mail Quattrone wrote to his staff in Palo Alto in December 2000, which encouraged his team members to comply with an e-mail sent a day earlier by another banker to “clean up” their files. Quattrone sent the e-mail two days after being told about the grand jury probe and a few hours after being advised to hire his own lawyer to represent him.

Quattrone was convicted in May 2004 of two counts of obstruction and one count of witness tampering. He was later sentenced to 18 months in jail, but was allowed to remain free pending appeal.

In its opinion Monday, the U.S. Second District Court of Appeal cited a “glaring deficiency” in Owen’s instructions to jurors by allowing them to convict Quattrone without first finding that he had an intent to obstruct justice.

“Under the charge, the jury was allowed to convict Quattrone of obstruction regardless of whether he intended such,” the opinion said.

The three justices based their ruling in part on the Supreme Court’s reversal last May of an obstruction conviction of accounting firm Arthur Andersen stemming from its shredding of Enron Corp. documents. The Andersen judge wrongfully told jurors they could convict even if Andersen employees thought their actions were proper.

“This case is yet more baggage from Arthur Andersen,” said George B. Newhouse Jr., a partner at Thelen Reid & Priest in Los Angeles.

Quattrone has maintained that he gave no thought to the government investigation when he sent out the e-mail. In sending the case back to the lower court, however, the appellate court said “the evidence is sufficient to support Quattrone’s conviction on each count.”

Keker said that statement should not be read as affirming his client’s guilt.

“They’re not saying he’s guilty,” he said. They’re saying there’s enough evidence to go to the jury.”