Nacchio's defense calls case against him flawed
By Sara Burnett
Rocky Mountain News
Wednesday, November 21, 2007
In its final court filing before facing the 10th Circuit Court
of Appeals next month, Joe Nacchio's defense team said Tuesday
that the government's arguments for convicting the former Qwest
CEO of insider trading were flawed and should be scrutinized
"The undisputed facts establish at least a reasonable doubt that
Nacchio sold these shares because he had insider information he
knew was material," attorney Maureen Mahoney argued in a 42-page
She also said the court should acquit Nacchio or reverse the
conviction and send the case back to U.S. District Court for a
new trial before a different judge.
The court is scheduled to hear oral arguments Dec. 18.
There is no date set for a ruling, which could come at any time
after the arguments.
At trial, and again in an appellate filing earlier this month,
prosecutors said the former CEO knew when he sold stock between
January 2001 and May 2001 that Qwest couldn't meet the
aggressive revenue goals it was projecting to investors.
They also said Nacchio knew those "hard facts" about future
revenue were critical, or material, to investors, but he kept
quiet because disclosing them would have sent the stock price
south -- as occurred after the company later shared the
Nacchio's attorneys argue that the CEO did nothing wrong.
He announced publicly that he planned to sell his shares, then
sold fewer shares than originally planned because he was
confident the stock price would go up -- not down, Mahoney
stated in Tuesday's filing. Qwest's audit committee and
outside auditors determined the information Nacchio had was not
material to investors, and the company's general counsel had the
option to stop Nacchio from selling but did not, she added.