Monday :: Mar 17, 2008

New trial for Nacchio

by Turkana

Earlier today, a federal appeals court overturned the insider trading conviction of former Qwest boss Joe Nacchio. As reported by the Associated Press:

A federal appeals court ordered a new trial Monday for former Qwest CEO Joe Nacchio, saying the trial judge wrongly excluded expert testimony important to Nacchio's defense in his insider trading case.

The court also ordered a new judge to hear Nacchio's case.

Nacchio was convicted in April on 19 counts involving the sale of $52 million worth of Qwest stock in 2001. He was sentenced to six years in prison but remained free on appeal. Jurors acquitted Nacchio of 23 counts.

But as this extraordinary post by Kagro X made clear, last October, the entire prosecution of Nacchio may have been but another retributive action against someone who wouldn't comply with Bush Administration demands:

a) Nacchio was found guilty of insider trading, for having sold Qwest stock he supposedly knew was overvalued.

b) But when he sold the stock, Nacchio actually had reason to believe he was on the verge of landing a huge federal contract for Qwest, which would have significantly raised Qwest's stock value.

c) Months before he sold his stock, Nacchio met with members of the NSA, both to discuss a huge federal contract and another, classified, matter. Nacchio claims to have refused to accede to Administration requests on the other matter, which is believed to have been about domestic spying. As is well-known, other telecoms did accede, and are seeking immunity for having violated their customers' privacy.

d) Qwest was denied the huge federal contract only after Nacchio had sold his stock.

e) Later, Nacchio was targeted by Bush's Securities and Exchange Commission for having made supposedly illegal trades.

f) Nacchio's defense depended on his proving what happened in that meeting with the NSA officials, and that he therefore didn't actually believe Qwest's stock was overvalued, when he sold it. Which would mean he hadn't actually violated insider trading laws.

g) Nacchio was not allowed to present the argument about retaliation at his trial.

So, Nacchio will get a new trial with a new judge, although it's not clear that this trial will be any more fair: the appeals court did not rule that Nacchio should be allowed to present the classified evidence. A pdf of the ruling can be downloaded here. Whether or not Nacchio was made a political target by a vindictive administration may require further investigation.

Turkana :: 5:39 PM :: Comments (4) :: Digg It!