Court will decide fate of Nacchio next week
If the appeals panel upholds his insider-trading conviction, few
options will remain.
By Andy Vuong
Sunday, Devember 9, 2007
The game will be on the line for former Qwest chief executive
Joe Nacchio next week when a three-judge panel hears the appeal
on his insider-trading conviction.
"It's definitely his best chance to get the conviction
attorney and former federal prosecutor Rick Kornfeld.
"When you have an appellate argument, that's kind of the Super
Bowl of the case."
That's because Nacchio's options will be extremely limited if
the panel upholds his conviction.
The 10th U.S. Circuit Court of Appeals in
will disclose Monday which judges have been assigned to the
Up to this point, the appeal has been a paper battle between
defense attorney Maureen Mahoney and Justice Department attorney
Mahoney and Oestreicher, both based in
D.C., will each have 15 minutes on
Dec. 18 to make their first and only live remarks to the panel
that will decide Nacchio's fate.
If the appeal fails, Nacchio can ask the same panel to rehear
the case as well as seek an "en banc" review, meaning all of the
judges in the 10th Circuit would hear the case. Both are
As a last resort, he can petition the Supreme Court to take the
case, a request that is granted only about 1 percent of the
The three-judge panel will consider the case before rendering a
decision, but it has been set for expedited review.
Nacchio remains free on bail pending the outcome of his appeal —
an indication that the appeal has substance.
After a month-long trial in
federal court, Nacchio was convicted in April on 19 counts of
illegal insider trading connected to his sale of $52 million in
Qwest stock in early 2001. He was acquitted on 23 other
He was sentenced to six years in prison and ordered to forfeit
the $52 million in ill-gotten gains and pay $19 million in
While both Mahoney and Oestreicher will have prepared remarks
for the Dec. 18 hearing, it's likely they'll spend most of their
time answering questions from the judges, experts say.
Both sides have already filed briefs detailing their arguments.
Once the names of the judges are disclosed, the attorneys will
review those judges' case histories.
"They'll do a much more intense review of those judges'
decisions that might be relevant to the case, those judges'
judicial philosophies and approaches to argument," said Marcy
Glenn, head of appellate practice at Holland & Hart. "The
lawyers will factor all of that into how they present their
Kornfeld said oral arguments are "real important" to the case.
"You can sway a court under certain circumstances," he said.
In her appellate brief, Mahoney asserts there was insufficient
evidence to prove Nacchio sold Qwest stock on the basis of
material, nonpublic information.
Mahoney also argues that Judge Edward Nottingham erred by not
instructing jurors about the materiality of certain information
Nacchio received from his lieutenants.
The crux of the government's case was that Nacchio accelerated
his stock sales while he was warned privately that the company
was slipping financially. The defense contended that the
warnings were about internal revenue targets and not publicly
stated financial projections.
Mahoney is also challenging Nottingham's
refusal to allow a defense witness to testify about materiality
and rulings related to Nacchio's classified-information defense.
Nacchio's case is the only hearing on the court's calendar for
Dec. 18, which opens the door for the hearing to run longer than
the allotted 30 minutes.
The three-judge panel can uphold Nacchio's conviction, acquit
him on the charges or grant him a new trial. If the
conviction is upheld, the panel also will rule on Mahoney's
request for a lighter sentence.
Nacchio is not required to attend the hearing, but Kornfeld said
he expects Nacchio's attorneys to encourage him to show up.
"You want those judges to see the human being that they're
deciding about," Kornfeld said.
During his five-year tenure, Nacchio led Denver-based Qwest
through tremendous growth. But the company teetered on the
brink of bankruptcy in the summer of 2002 amid an accounting
scandal and the tech downturn. Nacchio was ousted in June
2002, and the company later restated more than $2 billion in
revenue booked under Nacchio's watch.
Andy Vuong: 303-954-1209 or