AUSWR
The Association of U S West Retirees
 

 

 

Jurors to Resume Deliberations In Nacchio Trial on Monday
Associated Press

The Wall Street Journal
Saturday, April 14, 2007


DENVER -- Jurors deliberated a second day in the $101 million insider-trading trial of former Qwest Communications International Inc. chief executive Joe Nacchio before being dismissed for the weekend.

The eight men and four women deliberated Friday while attorneys for both sides remained close by in case questions arose.  U.S. District Judge Edward Nottingham then released the jurors until Monday, saying, "Let the case go for the weekend.  You've worked very hard."

In a related development, prosecutors told Mr. Nottingham in a brief filed Friday that Mr. Nacchio should be required to forfeit the $101 million in gross proceeds from the sales if convicted on all 42 counts.

Prosecutor Kevin Traskos, who drafted the brief, said the judge, not the jury, should determine the amount of money to be forfeited in the event of a guilty verdict.

The $101 million cited in the indictment was the gross amount that Mr. Nacchio received from the sales, excluding any taxes or the strike price of the options he exercised.

Prosecutors pointed to a document that committed Mr. Nacchio to selling shares in early 2001 that they say was backdated from December 2000, when Mr. Nacchio received the financial warnings, to November 2000.

Defense attorneys say Mr. Nacchio believed Qwest would succeed in the wake of its 2000 acquisition of U S West Inc. and have noted Mr. Nacchio wanted to resign in January 2001 to stay in New Jersey with his family during a difficult time.

The jurors are a diverse group, including several with education or experience in the financial or insurance industries, an airline pilot, a school district maintenance supervisor, a chemist and a business owner.  Most live in metropolitan Denver, although some live north of the city as far as Fort Collins, which is 60 miles away.

The jurors started deliberations Thursday and made several requests, including writing materials, more copies of the indictment and a master list of evidence.  The requests were signed by the airline pilot who identified himself as the foreman.

The case against Mr. Nacchio was filed after the government investigated an accounting scandal at Denver-based Qwest shortly after it acquired US West, a primary telephone service provider in 14 mostly Western and midwestern states.

The Securities and Exchange Commission has said Qwest falsely reported fiber-optic capacity sales as recurring instead of one-time revenue between April 1999 and March 2002, which forced the company to restate $2.2 billion in revenue.

The SEC has a pending civil fraud lawsuit against Mr. Nacchio and other former executives at Qwest.

http://online.wsj.com/article/SB117652479647470058.html?mod=hps_us_at_glance_technology