Guilty Verdict Reversed, Ex-Qwest CEO Nacchio Gets New Trial - InformationWeek

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Guilty Verdict Reversed, Ex-Qwest CEO Nacchio Gets New Trial

The appeals court said the trial judge had improperly prevented the introduction of expert testimony and classified information as part of Nacchio's defense.

Ex-Qwest CEO Joseph Nacchio, facing a prison term and millions in fines, will get a new trial after an appellate court in Colorado on Monday reversed his guilty verdict on insider trading.

The judges in the 10th Circuit Court of Appeals said trial judge Edward Nottingham had improperly prevented the introduction of expert testimony and classified information that Nacchio's attorneys tried to present as part of his defense.

Nacchio lost a lengthy jury trial last April and was convicted on 19 counts of insider trading. Prosecutors charged Nacchio sold his stock after he had been informed by other Qwest executives that the company's finances were falling in the early part of the decade. The prosecutors maintained that Nacchio continued to reassure investors while Qwest stock was collapsing.

Nacchio had argued that he had been blocked during the trial from presenting evidence that he had kept Qwest from participating in work for the National Security Agency, work he considered illegal. Judge Nottingham also effectively kept law professor Daniel Fischel from testifying on the former executive's behalf.

Nacchio declined to take the stand on his own behalf. Initially charged with selling $52 million in Qwest stock, Nacchio had been ordered to forfeit the $52 million. His attorneys also argued that Nacchio had been distracted during the period he was selling Qwest stock because his son had tried to commit suicide.

The appellate panel ruled 2 to 1 to reverse the earlier decision.

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