verdict not likely to cheer Nacchio
By Greg Griffin, Staff Writer
Friday, May 26, 2006
Charges of criminal insider trading -- such as those faced
by former Qwest chief executive Joe Nacchio -- are difficult
The verdict against form Enron chief executive Jeff Skilling
on Thursday bears out that notion. Though the jury found
Skilling guilty on all 18 conspiracy and fraud charges, they
acquitted him on all but one of 10 insider-trading charges.
Good new for Nacchio? Not necessarily, say experts in
The government needs a conviction on just one
insider-trading count against Nacchio to put him in prison
for us to 10 years. He faces 42 counts of selling $100.8
million in Qwest shares from January to May 2001.
Nacchio has denied the charges and is seeking to have them
dismissed. His attorney in Denver, John Richilano, declined
The sheer volume of counts against Nacchio may be the
government's most powerful weapon, said Michael Miller, a
former prosecutor who specialized in white-collar defense at
Piliero Goldstein Kogan & Miller in New York.
"If the government establishes that he avoided losses by
selling based on material nonpublic information that the
company was struggling, that feels like a pretty strong
case," Miller said.
The government says Nacchio sold stock when he was aware --
but did not disclose publicly -- that the company's
financial situation was deteriorating dramatically.
To prove their case, prosecutors must demonstrate with
conclusive evidence that Nacchio acted on inside information
when he sold his shares.
"The government is going to need to prove not only what
Nacchio knew but also to link his knowledge to the decision
to sell," said Peter J. Henning, a law professor at Wayne
State University in Detroit who specializes in white-collar
Staff writer Andy Vuong
contributed to this report.
Staff writer Greg Griffin can be reached at 303-820-1241 or