Legal News

Tenth Cir. Grants Review of Nacchio?s Insider Trading Case

By Dan Slater

Former Qwest CEO Joseph Nacchio talks to the media outside the federal courthouse in Denver, Dec. 20, 2005. (AP Photo/Ed Andrieski, File)

On this humid and hot New York morning, as the City’s straphangers shvits their way to the office, let’s begin our day in Denver, where the sun is just beginning to rise over the Rockies, and where former Qwest CEO Joe Nacchio is back on the hot seat.

Late yesterday, a nine-judge panel of the Tenth Circuit Court of Appeals granted the government’s request for a full review of Nacchio’s insider-trading case. In March, his conviction had been tossed by a three-judge panel of the same appellate court. Here’s a report from the Denver Post, and here’s the court’s order.

A quick refresher: Nacchio — whom the feds charged with 42 counts of insider trading, alleging that he sold $101 million worth of Qwest stock in 2001 when he possessed information that the company wasn’t doing as well as it had led investors to believe — was found guilty by a jury on 19 counts in April 2007. For his appeal, Nacchio tapped donut-loving Maureen Mahoney, who filed this brief on his behalf. (While all this was happening, Edward Nottingham, the federal judge who presided over Nacchio trial, made headlines when his wife ended their marriage after she discovered more than $3,000 in receipts from a Denver strip club.) In March of this year, Mahoney delivered the goods for Nacchio, as a three-judge panel of the Tenth Circuit Court of Appeals ordered a retrial, voting 2-1 to overturn all 19 guilty counts because, the appellate court ruled, Judge Nottingham — of strip club fame — had improperly excluded an expert witness ready to testify for Nacchio.

That’s a fair amount of history. And now we must brace ourselves for another chapter. Oral arguments have been scheduled for September 24 at the federal appeals court in Denver. The appellate review will take place before a nine judge panel.

Nacchio, 59, has remained free on a $2 million bond during the legal proceedings. In February, Cliff Stricklin, the prosecutor who spearheaded the Nacchio prosecution, joined Denver-based Holland & Hart as a commercial and securities litigator.

In other former-prosecutor news, last week, the Rocky Mountain News reported that Latham’s Sean Berkowitz, who prosecuted former Enron execs Ken Lay and Jeff Skilling, is defending Nacchio from civil fraud charges brought by the SEC.

Full post as published by Law Blog - WSJ.com on July 31, 2008 (boomark / email).