Postponed in Case Against Former Qwest CEO
By Shawn Young
The Wall Street Journal
Saturday, July 8, 2006
The judge overseeing the criminal insider trading case
Qwest Communications International Inc. Chief Executive
Joseph Nacchio delayed an important hearing in the case
because of the complex logistics involved in reviewing
classified material introduced by the defense.
Saying he needed extra time for his staff to get the
security clearances and facilities that are legally required
for handling the classified materials, Denver-based U.S.
District Judge Edward Nottingham on Friday postponed the
hearing to August 25 from July 14. He is scheduled to rule
on a variety of motions from both sides, including a defense
motion to dismiss the case.
Mr. Nacchio is fighting charges that he sold $101 million in
stock in early 2001 with insider knowledge that the
Denver-based phone company was about to falter. In court
filings, his attorneys have said he was optimistic about the
company's prospects because, based on classified
information, he thought Qwest was poised to win important
contracts related to national security.
Prosecutors have argued that the national security aspect of
the defense is a smokescreen with no relevance to the
charges. Even if the company had won the government
contracts, they wouldn't have solved the underlying problems
that Mr. Nacchio knew the company faced, prosecutors have
said in court filings.
Mr. Nacchio was indicted late last year on 42 counts of
insider trading that carry a maximum penalty of 10 years in
prison each. Qwest eventually restated $2.5 billion in
revenue and $2.2 billion in earnings for 2000 and 2001. Mr.
Nacchio is not accused of falsifying the books. In addition
to the criminal charges, Mr. Nacchio faces civil fraud
charges in a suit brought by the Securities and Exchange
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