seeking change of venue
Publicity cited in case against ex-Qwest exec
By Jeff Smith
Rocky Mountain News
Saturday, March 25, 2006
Attorneys for former Qwest Chief Executive Joe Nacchio said
Friday they want his insider-trading trial moved out of
Colorado because of the "pervasive negative publicity"
against him here. They also questioned whether the U.S.
District Court in Denver has jurisdiction in the case at
all, because, they said, Nacchio's stock trades were made
out of state.
The comments by defense attorneys John Richilano and Herbert
Stern came after federal Judge Edward Nottingham shot down,
as expected, the defense's motion for the 42-count
indictment to be dismissed.
Nacchio, 56, has been accused of dumping $100 million of
Qwest stock in the first five months of 2001 after being
warned, among other things, that the company's financial
targets were a "huge stretch." Each charge carries a
maximum penalty of 10 years in prison and a fine of up to $1
Nacchio wasn't required to appear in court.
U.S. Attorney for Colorado Bill Leone declined to comment
after Friday's hearing. Defense attorneys also didn't
It's rare for a judge to grant a change of venue except in
high-profile criminal cases such as the Timothy McVeigh
Oklahoma City bombing case.
And to prove the Colorado court lacks jurisdiction, defense
attorneys likely will have to show Nacchio didn't place
telephone calls from Denver to his investment managers.
Stern acknowledged he didn't know; Nottingham suggested he
Nottingham rejected defense assertions that the alleged
warnings to Nacchio failed to rise to the level of material
information required to be disclosed to investors.
Nottingham cited case law that "materiality is a question
for the jury."
But Nottingham did side with the defense that the
government's allegations were too vague and required the
prosecution to "flesh out" what experts have called a
Among other things, prosecutors are being ordered to
identify some of the "risky" one-time transactions Qwest
made and how the various financial risks would put the
company's targets in jeopardy.
Stern re-argued the defense's position even after Nottingham
denied the motion for the case to be dismissed.
In a glimpse of what may come during a trial, Stern
maintained Nacchio didn't have to refrain from selling stock
because the financial risks he was warned about weren't
material and that the government hasn't questioned the
accuracy of Qwest's accounting.
Stern made the quip that one would have had to "join hands
in a seance" in 2000 to know Qwest was later going to fall
on hard times.
Insider-trading cases hinge on a defendant's state of mind
at the time he sold stock, and prosecutors will need to
convince a jury that Nacchio knew Qwest's numbers were being
propped up by risky one-time deals.
Nacchio, who served on a government advisory panel, has also
indicated he may argue that he possessed classified
information that made him optimistic about Qwest's
government business prospects.
Nottingham said he still hopes for a trial as early as this
fall and indicated he will likely set the date at the next
pretrial hearing June 9.