Retrial: No sure way to tell who has edge
By Jeff Smith and Sara Burnett
Rocky Mountain News
Wednesday, March 19, 2008
Who has the upper hand if the government retries former Qwest
CEO Joe Nacchio? It depends on whom you ask.
A panel of the 10th Circuit Court of Appeals reversed Nacchio's
insider trading conviction Monday, saying a defense expert
should have been allowed to testify on his behalf.
But it also said the government's evidence was enough for a jury
to convict, so rather than acquit Nacchio, the judges sent the
case back for a new trial. Prosecutors are expected to
appeal the decision.
Meanwhile, legal experts already are handicapping the possible
Plea bargain: A plea bargain is typical in cases
that have been reversed. But several legal experts said
it's unlikely here.
The government likely will want a deal that involves prison time
-- something Nacchio is unlikely to accept.
"Nacchio has gone this far, and I think he's a player," said
MoyeWhite attorney James Rollin Miller.
New trial: Miller thinks a new trial favors Nacchio.
His legal team wasn't allowed to present much of his defense at
trial, while the prosecution already has shown its full hand.
"At a retrial, the defense is holding all the cards," Miller
defense attorney Jeralyn Merritt said since Nacchio already has
seen the government's case, "he can more specifically tailor his
Some wonder if Nacchio's lead attorney, Herbert Stern, would try
a second case. Stern at times rambled and at times
appeared rattled by U.S. District Judge Edward Nottingham.
Merritt's take: "Does Nacchio want to start from ground
zero (with a new defense team)? I thought the defense team
was very good." Stern's team also may get along better
with a new judge.
But others say the 10th Circuit's decision favors the
prosecution. The Nacchio insider-trading case is a complex
securities case. While the prosecution kept it relatively
simple during the first trial, it would be able to home in even
more on a second attempt.
At the first trial, prosecutors had to present evidence of 42
counts of insider trading, one for each time Nacchio sold stock
between January and May 2001. That included two counts
that dealt with more complicated growth shares.
The jury acquitted Nacchio on the earlier sales, but convicted
on the 19 sales in the second quarter.
At a retrial, the government only would have to focus on those
University of Denver professor John Holcomb said the
10th Circuit's ruling that the government's evidence was
sufficient for a jury is another good sign for prosecutors.
"This makes it highly unlikely that another jury and court will
come to a different conclusion on guilt when the case is argued
on remand," he said.
There's another possible wrench. If a Democrat is elected
president in November, U.S. Attorney for Colorado Troy Eid, a
Republican, is likely to be replaced.
And Eid's lead prosecutor on the Nacchio case, Cliff Stricklin,
is leaving the office for private practice next month.
Eid has said the Nacchio case remains in capable hands with
prosecutors James Hearty and Kevin Traskos. But a new U.S. attorney could bring in a whole
new team -- or decide to drop the case altogether.