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The Association of U S West Retirees
 

 

 

Nacchio hearing held in secret
By Andy Vuong, Staff Writer
Denver Post
Thursday, October 12, 2006

A federal judge held another closed hearing today in former Qwest chief executive Joe Nacchio's criminal insider trading case to discuss the handling and relevance of classified information that may be presented during trial.

U.S. District Judge Edward Nottingham also closed a portion of a hearing in August to discuss similar matters.  Nottingham overruled an objection by The Denver Post concerning the closure of that hearing.

Nacchio faces 42 counts of illegal insider trading connected to his sale of $100.8 million in Qwest stock in early 2001.  Each charge has a maximum penalty of 10 years in prison and a $1 million fine.  Prosecutors allege he knew that the company's finances were faltering.  He left the company in mid-2002.

The trial is set for March 19 and could last up to eight weeks.

Nacchio's attorneys have said they want to use classified information to argue that Nacchio had a rosy outlook for Qwest in early 2001 because he knew the company was in line to receive large government contracts.

Before departing Qwest, Nacchio served on two federal advisory panels dealing with national-security issues:  the Network Reliability and Interoperability Council and the National Security Telecommunications Advisory Committee.  He wasn't nominated to serve on the latter panel until July 2001 -- which is after the period when he allegedly made illegal insider trades.  During an open portion of today's hearing, Nottingham granted the prosecution's motion to file documents under seal.  He also discussed jury instruction, saying that jurors will be told that the government, to win a conviction, must prove beyond a reasonable doubt that Nacchio acted "willfully with the intent to defraud, manipulate and deceive".

Staff writer Andy Vuong can be reached at 303-954-1209 or avuong@denverpost.com .

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