Former Qwest CEO's trial resumes; unknown if he'll testify
By SANDY SHORE, AP
Monday, April 9, 2007
DENVER (AP) - Defense attorneys resumed their case in Joe
Nacchio's $101 million insider trading trial Monday without
revealing publicly whether the former chief executive of Qwest
Communications International Inc. will testify.
Testimony began about an hour late after U.S. District Judge
Edward Nottingham questioned a juror about a conversation she
reported having with someone, possibly a news reporter, who
sought her opinion last week of how the former Qwest chief's
trial was progressing.
Prosecutors have told jurors Nacchio completed the stock sales
between January and May of 2001 after learning from business
managers that the company was at financial risk and could miss
Defense attorneys have argued the sales were legal because
Nacchio believed in the company's future and was required to
exercise the stock options under the terms of his contract.
Daniel Fischel, an author and college professor called as an
expert witness, testified that Nacchio sold 12.6 percent of
eligible stock options in the first quarter of 2001 and 22.8
percent of eligible options in the second quarter of that year.
That compared with 14.6 percent in the third quarter of 2000 and
14.5 percent in the fourth quarter of 2000, Fischel said.
Fischel's testimony was designed to counter the prosecution's
contention that Nacchio accelerated his trades ahead of the
worsening financial picture at Qwest.
Fischel told jurors that the defense paid him $25,000 for
research and testimony at the trial.
Last week, Qwest founder Phil Anschutz testified Nacchio was
ready to resign in January 2001 so he could remain in New Jersey
with his family after one of his sons attempted suicide.
The criminal case against Nacchio stems from a long government
investigation into an accounting scandal at Qwest, a
Denver-based primary telephone service provider in 14 mostly
Federal regulators have said Qwest falsely reported fiber-optic
capacity sales as recurring instead of one-time revenue between
April 1999 and March 2002. The practice allowed Qwest to
improperly report about $3 billion in revenue, which helped pave
the way for its acquisition of U S West Inc., regulators have
alleged. Qwest later restated about $2.2 billion in revenue.
The Securities and Exchange Commission has filed a civil fraud
suit that is still pending against Nacchio and other former
Qwest executives, alleging they orchestrated a financial fraud
that led to the scandal.
The juror who reported speaking to a member of the press told
the court clerk on Monday she was in a courthouse elevator when
the individual asked "how she thought the case was going,"
Nottingham said before meeting with the juror and attorneys for
After reconvening the trial, Nottingham said, "I'm not
suggesting anything improper has occurred," but he asked
spectators and news reporters to refrain from riding in
elevators with jurors.