The seemingly never-ending saga of whether Qwest Communications ex-CEO Joseph Nacchio should go to prison for selling his Qwest stock on insider information will have at least another chapter: An appeals court is now expected to decide whether Nacchio will get a new trial.
On Thursday, the U. S. Court of Appeals for the 10th Circuit reviewed earlier decisions in Nacchio's case. The latest chapter centers on whether a trial judge had unfairly blocked a financial expert from testifying on Nacchio's behalf during the jury trial in which Nacchio was found guilty.
Judge Edward Nottingham last year sentenced Nacchio to six years in prison and ordered him to pay more than $70 million in penalties. That's more than the $52 million in stock profits Nacchio received illegally while at the helm of the telecommunications firm.
A ruling by the appeals court could send the entire case back for a new trial.
During the trial in 2007, Judge Nottingham excluded financial expert Daniel Fischel from testifying on Nacchio's behalf. Fischel was expected to affirm Nacchio's claim that he was simply selling Qwest stock because options on the stock were about to expire.
According to media reports, the panel of judges peppered both prosecuting and defending lawyers with questions about testimony by the expert and why it wasn't allowed during the jury trial.
"This suggests to me that the district judge has such a low opinion of economic expertise that he doesn't think there should be such expertise at a trial like this," said Judge Michael McConnell.
The appeals proceeding lasted less than an hour. Nacchio, who is released on bail, didn't attend the packed-courtroom hearing.
Legal scholars who attended the hearing, and who have followed the case closely, told The Denver Post that Nacchio's conviction was likely to be upheld.
"There's a strong possibility that the panel is going to reinstate the conviction, based on their questions," University of Denver law professor Jay Brown told the newspaper.