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DU 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 so far.

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 decision.

Bios

  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 at DU.

http://www.rockymountainnews.com/drmn/tech/article/0,2777,DRMN_23910_5486257,00.html