Allegations against Spitzer don't affect Nacchio case, experts
By Jeff Smith
Rocky Mountain News
Wednesday, March 12, 2008
It's been a wild week in the continuing saga of former Qwest CEO
Joe Nacchio. And that's without any new development in his
criminal or civil cases.
First, 9News reported last week that Chief Federal Judge Edward
Nottingham, who presided over Nacchio's insider-trading criminal
trial, may have been a customer of an escort service.
Now, New York Governor and former prosecutor Eliot Spitzer, who
once sued Nacchio in connection with stock sales, allegedly was
a client of a pricey escort service.
"You can't help but note the irony that two of the people most
responsible for Joe Nacchio's justice-system problems are almost
simultaneously in the news with alleged ethical problems of
their own," former Denver prosecutor Craig Silverman said
Tuesday. "Somewhere in New Jersey, a man (Nacchio) is probably
But as Silverman and other experts point out, none of the past
week's events detract from the legal actions against Nacchio.
A jury convicted Nacchio of insider-trading charges. The
case was brought by federal prosecutors who haven't been
implicated in any scandal. And many experts praised
Nottingham's handling of the case, although some of
his decisions are now being scrutinized by a three-judge
Spitzer became famous for his zealous attacks on Wall Street as New York's attorney
general. The cases ensnarled prominent Colorado executives and companies such as
Nacchio, Qwest founder Phil Anschutz, Invesco and Janus.
Spitzer charged Nacchio and Anschutz with improperly profiting
from hot initial public offering stocks in exchange for steering
investment banking business to Salomon Bros.
In 2003, Anschutz agreed to donate $4.4 million to settle the
allegations, while maintaining that he did nothing improper.
Anschutz spokesman Jim Monaghan declined to comment about
Spitzer on Tuesday.
Nacchio donated $400,000 to
law schools in late 2003 to settle his IPO case. Spitzer
led the charge against Invesco and Janus for alleged abusive
mutual fund trading practices. In 2004, Invesco paid
$451.5 million and Janus paid $226.2 million to settle
and federal regulators also joined in.