students, profs weigh in on ex-CEO's trial
By Rocky Mountain News
Monday, April 16, 2007
Professors and students from the University of Denver Sturm
College of Law have been attending the trial of Joe Nacchio and
blogging about it on their Web site, theracetothebottom.org. We
asked four of the contributors what they've thought of the trial
What was the best evidence the prosecution had?
• Vaughn Marshall: In my opinion, the backdated
document relating to Nacchio's Jan. 2 and 3 sales became the
closest thing the government was going to get to a "smoking
gun." If the jury believes that this proves Nacchio traded on
the basis of material, nonpublic information in regards to the
first two charges, it really increases the possibility that the
prosecution will obtain convictions on all the other counts.
What was the best evidence the defense had?
• Kevin O'Brien: The best evidence was the fact
that Qwest had made its numbers for 17 consecutive quarters up
to and including the first two quarters of 2001 when Nacchio is
accused of insider trading. The defense attorneys used every
opportunity to drive this point home to the jury to show his
good faith and the lack of material nonpublic information. Even
in the face of contrary views of his officers, why shouldn't
Nacchio be bullish about Qwest's continued ability to make the
numbers in 2001 given its successful history?
What were the prosecution's tactical strengths?
• Vaughn Marshall: The prosecution's very
no-nonsense, workmanlike approach was a great benefit in my
opinion. With a white-collar crime case that involves a wealthy
defendant, a "big government" demeanor seems very appropriate to
me. The prosecution played this part extremely well. I was
also highly impressed by how comfortable all the government
attorneys appeared during testimony and arguments. They really
appeared to be well-prepared and in their element.
What were the defense's tactical strengths?
• Armin K. Sarabi: If the defense had any
tactical strengths, which I'm sure they did, I was not able to
pick up on them (a tactical strength in itself). Oftentimes, I
wondered what it was exactly the defense was trying to do and
why they never seemed to get their act together. However,
knowing what I now know about Mr. Stern, I highly doubt his team
was as disheveled as they appeared to be. Also, the defense had
a much easier case as they simply had to poke holes in the
government's case, and I think in that sense they did a great
job of creating enough disarray and confusion in the
government's story to produce a noticeable disconnect in the
mind of the jury.
Who had the best opening and closing arguments?
• Kevin O'Brien: Stern backed up his opening
arguments with a superb, meticulous closing argument that very
possibly provided ample reasonable doubt in the minds of the
jury. Point by point, Stern cited evidence throughout the trial
that Nacchio was just being "optimistic, and that is not a
crime." However, in rebuttal during closing, Stricklin did a
masterful job in countering every point by Stern. Stricklin's
stunning performance was the defining moment of the trial.
• John Holcomb: The prosecution did, by a wide
margin, and especially in the closing arguments. It was more
even in the opening statements before all the damage was done.
Stricklin gave a powerful close, had a great sense of
priorities, demolished most of the defense arguments, and
clinched the issues surrounding intent, demonstrating it through
both the words and conduct of Nacchio. He also dealt
appropriately and delicately with the personal issues
confronting Nacchio. Stricklin is a great litigator.
What would your verdict be?
• O'Brien: The government has proven its case on
all counts based upon the showing of bad intent in 2000 related
to the backdating of his first trading plan or at least for the
trades after Nacchio terminated his second trading plan in
February of 2001.
• Marshall: It all comes down to what the jury
finds compelling. I do believe that the defense raised a
reasonable doubt with the evidence they put on. The jury could,
however, find Nacchio guilty after Stricklin did such a good job
emphasizing the backdated sell order.
• Holcomb: Guilty. Mr. Stricklin erased any
reasonable doubt in his closing argument. I can see a jury
hedging on two of the 42 counts, those related to the growth
shares as opposed to the stock options, but if we get a "not
guilty" verdict, that would raise questions surrounding the
internal dynamics of the jury.
• Sarabi: Looking at this case from my
perspective, I have little doubt that Mr. Nacchio knew what he
was doing. . . . On the other hand, if I were a member of the
jury, I would most likely have voted "not guilty" but only
because this is a criminal case, and the burden of proof for the
government is so high. If I had to guess the outcome of this
case, I would say Mr. Nacchio will either walk on a large
majority of the counts or the jury will not be able to come to a
• Kevin O'Brien is an associate professor in the
Department of Business Ethics and Legal Studies.
• Vaughn Marshall is pursuing law and MBA degrees
from DU. He is in his second year of law school and first year
of business school.
• John Holcomb is an associate professor in the
Department of Business Ethics and Legal Studies.
• Armin K. Sarabi is a candidate for a law degree