The Association of U S West Retirees



Stock verdict not likely to cheer Nacchio
By Greg Griffin, Staff Writer
Denver Post
Friday, May 26, 2006

Charges of criminal insider trading -- such as those faced by former Qwest chief executive Joe Nacchio -- are difficult to prove.

The verdict against form Enron chief executive Jeff Skilling on Thursday bears out that notion.  Though the jury found Skilling guilty on all 18 conspiracy and fraud charges, they acquitted him on all but one of 10 insider-trading charges.

Good new for Nacchio?  Not necessarily, say experts in white-collar defense.

The government needs a conviction on just one insider-trading count against Nacchio to put him in prison for us to 10 years.  He faces 42 counts of selling $100.8 million in Qwest shares from January to May 2001.

Nacchio has denied the charges and is seeking to have them dismissed.  His attorney in Denver, John Richilano, declined comment Thursday.

The sheer volume of counts against Nacchio may be the government's most powerful weapon, said Michael Miller, a former prosecutor who specialized in white-collar defense at Piliero Goldstein Kogan & Miller in New York.

"If the government establishes that he avoided losses by selling based on material nonpublic information that the company was struggling, that feels like a pretty strong case," Miller said.

The government says Nacchio sold stock when he was aware -- but did not disclose publicly -- that the company's financial situation was deteriorating dramatically.

To prove their case, prosecutors must demonstrate with conclusive evidence that Nacchio acted on inside information when he sold his shares.

"The government is going to need to prove not only what Nacchio knew but also to link his knowledge to the decision to sell," said Peter J. Henning, a law professor at Wayne State University in Detroit who specializes in white-collar crime.

Staff writer Andy Vuong contributed to this report.

Staff writer Greg Griffin can be reached at 303-820-1241 or