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The Association of U S West Retirees
 

 

 

Nacchio's attorneys ask judge to delay trial
By Andy Vuong, Staff Writer
Denver Post
Wednesday, February 7, 2007


The Department of Justice has turned over witness interviews that could help clear former Qwest chief executive Joe Nacchio of some of the illegal insider trading charges against him, defense attorneys said in a court filing Tuesday.

The filing also asked Judge Edward Nottingham to delay the trial, set for March 19, by at least 60 days, so the defense can review the new evidence.

Specifically, a Bear Stearns broker said he encouraged Nacchio to cut his holdings in Qwest stock as early as July 2000.

The broker, Salvatore A. Tiano, also said he called Nacchio between April 27, 2001, and May 15, 2001 -- which falls within the time frame the government alleges Nacchio made illegal insider trades -- to recommend that Nacchio lower the "floor" price on his planned sale of Qwest stock that was scheduled to begin on May 15, 2001.  The floor price, $38 a share at the time, was the lowest price Nacchio would be willing to sell.

Tiano told the government Nacchio said he was "adamant" the stock was a great buy at $38 and did not want to sell below that price.

That is "inconsistent with the government theory that Mr. Nacchio sold the stock on the basis of warnings that the company would not meet its public guidance," Nacchio's attorneys wrote in the filing.

Nacchio faces 42 counts of illegal insider trading connected to his sale of $101 million in Qwest stock between Jan. 2, 2001, and May 29, 2001.  The government alleges Nacchio sold the stock while he knew the company's finances were deteriorating.

Nacchio has pleaded not guilty.  He faces up to 10 years in prison and a $1 million fine for each count.

"That could certainly be helpful evidence to him -- at the very moment when he's supposed to be bailing out of the stock, he's telling a broker, 'This is a great buy,"' said Peter Henning, a professor at Wayne State University Law School in Detroit.  "The comeback is, what CEO is going to say, 'my company is going into the tank?"'

Jeff Dorschner, a spokesman for the U.S. Justice Department in Colorado, declined comment.

The defense has complained the government is dragging its feet in turning over evidence, an argument reiterated in Tuesday's filing.  Nacchio's attorneys said they received a transcript of Tiano's interview on Friday.  The interview was done Nov. 15.

The government also recently gave the defense six CD-ROMs containing thousands of documents to review, according to the defense filing.

Staff writer Andy Vuong can be reached at 303-954-1209 or avuong@denverpost.com.

http://www.denverpost.com/business/ci_5171880