wrong to usurp jury's role
By Anthony Accetta
Sunday, April 1, 2007
Hamstrung. That's the only word for it.
Apparently Judge Edward Nottingham wanted former Qwest chief
executive Joe Nacchio to transfer $90 million to his wife a
little faster. Nottingham reportedly said that doing it nine or
10 months after Nacchio's alleged illegal insider trading in
2001 was insufficiently "proximate" for the jury to consider
whether the transfer was made to protect assets that could be
forfeited in the event of an insider-trading conviction.
So the jury will never know what was done. The government will
not be allowed to even try to prove possible criminal intent
behind the act. The jury will never get a chance to decide the
intent behind the act.
When, exactly, would the transfer have had to be made in order
to put it before the jury? The same day? The next day? The
next week after doing insider trades? What does the timing have
to do with it?
It is entirely possible that Nacchio didn't think he would get
caught, so he was in no hurry. It is entirely possible he
didn't think that corporate executives would come forward to
testify against him, so he was in no hurry.
It is also entirely possible there is a completely innocent
explanation, such as estate planning or repayment of a debt.
Excluding the testimony in its entirety deprives the government
of any opportunity to prove that Nacchio simply didn't act until
he had something to be afraid of.
Was that the case with this $90 million stash? That would be
for the jury to decide. Was the timing consistent with guilt or
some other reason? That should be for the jury to decide.
The judge has, in effect, decided that no jury could fairly find
that the transfer is evidence of a guilty mind. The judge has
made a finding of fact as to what the defendant might have
thought. He has decided that the act of transfer was too far
away from the acts of alleged illegal insider trading -- which
themselves took place over a period of time -- to be relevant as
to whether insider trading actually occurred. Respectfully,
that should be up to the jury.
So far this logic would also preclude evidence of Qwest's
restatements of $2.5 billion, including $1.5 billion of "onetime
deals" that have been the focus of intense testimony from both
In fact, the behavior that led to the restatements is at the
heart and soul of the charges against Nacchio. So far the court
has excluded evidence of restatements, presumably on the theory
that the restatements were not proximate in time to the alleged
insider trading and thus somehow not relevant.
The government alleges that Nacchio believed that Qwest stock
would tank if the public knew what he knew about insiders' views
of Qwest's financial condition. The subsequent tanking of the
stock and the need to restate Qwest's financial condition -- for
the same period as the period in which he is alleged to have
engaged in illegal insider trading -- is a part of the alleged
crime itself. It is not some remote, unrelated event. It is
the result of the very facts Nacchio is alleged to have known
and to have acted upon. Of course the restatements came later.
That is the whole point. He acted before anyone else could.
While the stock price was high. Before it could crash.
The restatements could very well be evidence of the results of
the crime itself. They could be something entirely different,
as well. Maybe they had nothing to do with the information that
he is alleged to have traded on. That is for the government to
prove and the defense to rebut. But it is something that should
be before the jury. Let the jury decide.
Anthony Accetta is a former assistant U.S. attorney in New
York and former first assistant attorney general and special
prosecutor in Colorado. He heads the Denver-based Accetta
Group, which conducts private financial due diligence and