The Association of U S West Retirees



Judge wrong to usurp jury's role
By Anthony Accetta
Denver Post
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 sides.

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 investigations.