Nacchio wins go-to-prison reprieve
Qwest's ex-CEO won't have to report to jail while the judge reviews his high-court petition.
By Andy Vuong
Denver Post
Saturday, March 21, 2009

U.S. District Judge Marcia Krieger on Friday revoked an order requiring former Qwest chief executive Joe Nacchio to report to prison Monday to begin serving a six-year sentence for illegal insider trading.

Krieger didn't indicate when she would issue a new mandate to surrender or, in the alternative, grant Nacchio's request to remain free on bail while the Supreme Court considers whether to review his conviction.  In temporarily suspending the prison order Thursday, Krieger said she wanted time to review Nacchio's Supreme Court petition, which was filed Friday.

To grant Nacchio's request for bail, Krieger has to determine that the petition raises a substantial question for a high-court review.  If bail is awarded, Nacchio could remain free until at least June, which is when the Supreme Court is expected to decide whether to hear the case.  Last month, the 10th U.S. Circuit Court of Appeals affirmed Nacchio's conviction and revoked his bond, leading to Krieger's now-vacated order to report to prison by Monday.

In the Supreme Court petition, Nacchio's attorney, Maureen Mahoney, highlighted the unusual nature of Nacchio's case and alleged that the trial judge committed "prejudicial errors."

"This is the first time an executive has ever been charged with insider trading when the allegedly material 'inside' information consisted of internal corporate risk assessments about financial results for future quarters," she wrote.

Typical insider-trading cases involve inside information about pending mergers and acquisitions, instead of financial projections.  Mahoney said special standards may be needed to assess the importance of earnings forecasts and projections.  "The proper standard is a matter of great national importance and merits review," she wrote.

She also raised questions about jury instructions connected to materiality, the exclusion of expert testimony from a defense witness and the fairness of the trial judge, former U.S. District Judge Edward Nottingham.

Andy Vuong: 303-954-1209 or avuong@denverpost.com

http://www.denverpost.com/business/ci_11963467