considers classified documents in Nacchio case
By The Associated Press
Rocky Mountain News
Thursday, October 12, 2006
A federal judge closed a hearing Thursday in the insider trading
case against former Qwest Chief Joe Nacchio so attorneys could
debate the relevancy of classified documents detailing Qwest's
business dealings with the government. U.S. District Judge
Edward Nottingham briefly discussed potential jury instructions
before the closed-door session began.
Nacchio, who was not at the hearing, is accused of selling stock
in 2001 based on inside knowledge that Qwest would be unable to
meet revenue targets because it has improperly used nonrecurring
revenue for those goals.
Nacchio, who is charged with 42 counts of insider trading, has
said the classified documents gave hope for the company's
In court filings, Nacchio's attorneys have suggested he was
privy to secrets about the Denver telecommunication company's
potentially lucrative federal government contracts before he
sold his stock. Experts have said such knowledge could be used
to rebut prosecutors' allegations Nacchio dumped the stock in
the face of negative information that was unavailable to
Each count against Nacchio carries a penalty of up to 10 years
in prison and a $1 million fine. He is free on bail.
The trial is set for March 19.
In addition to the criminal case, Nacchio is one of several
former Qwest executives accused by the Securities and Exchange
Commission in a civil case alleging they orchestrated a
financial fraud that forced the company to restate billions of
dollars in revenue.
The SEC has said fraud between April 1999 and March 2002 allowed
Qwest to improperly report approximately $3 billion in revenue
that helped clear the way for its 2000 acquisition of the Baby
Bell U S West. The revenue was later restated.