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The Association of U S West Retirees
 

 

 

Judge delays Nacchio trial
Fall start targeted for complex insider-trading proceedings
By Greg Griffin, Staff Writer
Denver Post
Saturday, January 21, 2006

The federal judge overseeing former Qwest chief executive Joe Nacchio's insider-trading case allowed both sides more time Friday to prepare but said he's aiming for a fall trial date.

"I intend to try this case sometime in the fall of 2006 if possible," said U.S. District Judge Edward Nottingham.  Minutes earlier, Nottingham granted the defense's unopposed motion to declare the case complex, allowing a trial date to be set beyond a federally mandated limit of 70 days from the indictment date.

A grand jury indicted Nacchio, Qwest's CEO from 1997 to 2002, last month on 42 counts of criminal insider trading for $100.8 million in stock sales he made from January to May 2001.

Prosecutors say that during that time Nacchio knew that Qwest was in worse financial shape than he and the company were reporting to the public and could not meet performance expectations.

Nacchio has pleaded not guilty to each charge and is free on $2 million bond.  Part of Nacchio's defense may rely on his knowledge that Qwest was in line to receive lucrative, secret government contracts, his lawyers have said.  Under that defense, Nacchio believed the company was in better shape than the government alleges.

In making that defense, Nacchio's attorneys, as well as prosecutors and Nottingham, must receive clearance under the federal Classified Information Procedures Act, or CIPA, in order to review certain documents.  Nacchio attorney Herbert Stern said Friday that he is in the process of applying for clearance, which he expects to take at least five weeks.

Nottingham scheduled a status conference for March 24.

Also on Friday, the judge denied motions by the government and Nacchio's lawyers to seal certain filings made in the case in recent weeks that are related to CIPA.  He said the documents are not classified.

On Thursday, the government filed a motion outlining its case against Nacchio.  It will be narrowly focused on his trades and what he knew at the time.  The government said it will not attempt to prove accounting fraud at Qwest, as the Securities and Exchange Commission is in its civil case against Nacchio and a handful of other former Qwest executives.

Stern objected Friday to an agreement made prior to the indictment in which Qwest alerts investigators to any requests made by Nacchio for documents.

Nottingham said he does not have the authority to intervene in that matter.

Staff writer Greg Griffin can be reached at 303-820-1241 or ggriffin@denverpost.com.   

http://www.denverpost.com/business/ci_3423176