The court pointed to errors in the trial judge's jury instructions. As a result, the court held Quattrone, accused of encouraging subordinates to destroy documents sought by a grand jury, did not get a fair trial, reports The Washington Post.
The appeals court reassigned the case to a new judge, but noted the evidence against the former Credit Suisse First Boston LLC banker was more than sufficient for conviction.
If he faces a retrial, it will be the third one for Quattrone, whose first trial resulted in a hung jury.
A spokeswoman for the U.S. attorney's office said the ruling was being reviewed after which prosecutors will consider their options.
Separately, The New York Times reported Quattrone saying in a statement, "For over three years during this difficult ordeal, I have held my head high knowing I was innocent and never intended to obstruct justice."
The Times report said that in a similar setback to the government, the Supreme Court last year overturned the conviction of the accounting firm Arthur Andersen.