AUSWR
The Association of U S West Retirees
 

 

 

Former Qwest CEO's trial resumes; unknown if he'll testify
By SANDY SHORE, AP
money.aol.com
Monday, April 9, 2007


DENVER (AP) - Defense attorneys resumed their case in Joe Nacchio's $101 million insider trading trial Monday without revealing publicly whether the former chief executive of Qwest Communications International Inc. will testify.

Testimony began about an hour late after U.S. District Judge Edward Nottingham questioned a juror about a conversation she reported having with someone, possibly a news reporter, who sought her opinion last week of how the former Qwest chief's trial was progressing.

Prosecutors have told jurors Nacchio completed the stock sales between January and May of 2001 after learning from business managers that the company was at financial risk and could miss revenue targets.

Defense attorneys have argued the sales were legal because Nacchio believed in the company's future and was required to exercise the stock options under the terms of his contract.

Daniel Fischel, an author and college professor called as an expert witness, testified that Nacchio sold 12.6 percent of eligible stock options in the first quarter of 2001 and 22.8 percent of eligible options in the second quarter of that year.

That compared with 14.6 percent in the third quarter of 2000 and 14.5 percent in the fourth quarter of 2000, Fischel said.

Fischel's testimony was designed to counter the prosecution's contention that Nacchio accelerated his trades ahead of the worsening financial picture at Qwest.

Fischel told jurors that the defense paid him $25,000 for research and testimony at the trial.

Last week, Qwest founder Phil Anschutz testified Nacchio was ready to resign in January 2001 so he could remain in New Jersey with his family after one of his sons attempted suicide.

The criminal case against Nacchio stems from a long government investigation into an accounting scandal at Qwest, a Denver-based primary telephone service provider in 14 mostly Western states.

Federal regulators have said Qwest falsely reported fiber-optic capacity sales as recurring instead of one-time revenue between April 1999 and March 2002.  The practice allowed Qwest to improperly report about $3 billion in revenue, which helped pave the way for its acquisition of U S West Inc., regulators have alleged.  Qwest later restated about $2.2 billion in revenue.

The Securities and Exchange Commission has filed a civil fraud suit that is still pending against Nacchio and other former Qwest executives, alleging they orchestrated a financial fraud that led to the scandal.

The juror who reported speaking to a member of the press told the court clerk on Monday she was in a courthouse elevator when the individual asked "how she thought the case was going," Nottingham said before meeting with the juror and attorneys for both sides.

After reconvening the trial, Nottingham said, "I'm not suggesting anything improper has occurred," but he asked spectators and news reporters to refrain from riding in elevators with jurors.

http://money.aol.com/news/articles/_a/former-qwest-ceos-trial-resumes-unknown/n20070409132109990014