Feds "transform" testimony
By Andy Vuong
Wednesday, November 21, 2007
Federal prosecutors misrepresented testimony from former Qwest
chief executive Joe Nacchio's criminal trial in a filing in
which they argued for his conviction to be upheld, Nacchio's
appellate attorney alleges in a new court filing.
The government "consistently misrepresents testimony about
Qwest's higher internal (financial) goals as testimony about the
public projections, and stitches together quotes from unrelated
conversations to transform their meaning," Nacchio attorney
Maureen Mahoney writes in an appellate filing Tuesday.
A federal jury in April convicted Nacchio on 19 counts of
insider trading connected to his sale of $52 million in Qwest
stock in early 2001. Jurors said it was clear Nacchio sold
the stock on the basis of material, nonpublic information that
the company was in worse financial condition than he suggested
He was sentenced to six years in prison but remains free on bond
pending his appeal.
Mahoney laid out Nacchio's appellate case in an October filing,
claiming, among other things, that there was insufficient
evidence to convict him and the judge issued flawed jury
The government countered in a Nov. 9 filing that there was
plenty of evidence to convict him and the judge properly handled
In Tuesday's filing, Mahoney questions the government's
assertion that the following could be considered material
information independent of financial projections:
- The percentage of network capacity sales in Qwest's
revenue in the first quarter of 2001.
- A shortfall in new subscribers.
- A report from a Nacchio subordinate that suggested
capacity sales were drying up.
"If such matters were material, then no corporation or corporate
manager could buy or sell stock, ever," Mahoney wrote.
Oral arguments in the appeal are set for Dec. 18.