AUSWR
The Association of U S West Retirees
 

 

 

Feds "transform" testimony
By Andy Vuong 
Denver Post
Wednesday, November 21, 2007

Federal prosecutors misrepresented testimony from former Qwest chief executive Joe Nacchio's criminal trial in a filing in which they argued for his conviction to be upheld, Nacchio's appellate attorney alleges in a new court filing.

The government "consistently misrepresents testimony about Qwest's higher internal (financial) goals as testimony about the public projections, and stitches together quotes from unrelated conversations to transform their meaning," Nacchio attorney Maureen Mahoney writes in an appellate filing Tuesday.

A federal jury in April convicted Nacchio on 19 counts of insider trading connected to his sale of $52 million in Qwest stock in early 2001.  Jurors said it was clear Nacchio sold the stock on the basis of material, nonpublic information that the company was in worse financial condition than he suggested publicly.

He was sentenced to six years in prison but remains free on bond pending his appeal.

Mahoney laid out Nacchio's appellate case in an October filing, claiming, among other things, that there was insufficient evidence to convict him and the judge issued flawed jury instructions.

The government countered in a Nov. 9 filing that there was plenty of evidence to convict him and the judge properly handled the case.

In Tuesday's filing, Mahoney questions the government's assertion that the following could be considered material information independent of financial projections:

-  The percentage of network capacity sales in Qwest's revenue in the first quarter of 2001.

-  A shortfall in new subscribers.

-  A report from a Nacchio subordinate that suggested capacity sales were drying up.

"If such matters were material, then no corporation or corporate manager could buy or sell stock, ever," Mahoney wrote.

Oral arguments in the appeal are set for Dec. 18.

http://www.denverpost.com/business/ci_7519770