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Appellate Court Overturns Insider Trading Conviction of Former Qwest CEO

5:55 am on March 20, 2008 | Category: Business, Law

An appellate court has overturned the insider trading conviction of former Qwest Communications CEO, Joe Nacchio, on the grounds that the trial judge incorrectly excluded expert testimony and classified information that could have been instrumental in Naccio’s defense.

The 10th Circuit Court of Appeals in Denver, Colorado ruled in a 2-to-1 decision Tuesday that prosecutors must either retry Naccio, who was sentenced to six years in prison in April 2007 but remains free on bail, or drop the charges against him.

“The appellate court found that critical evidence was withheld from the jury and that Mr. Nacchio did not receive a fair trial,” said the former Qwest CEO’s lead defense lawyer, Maureen Mahoney, in a statement. “If the government decides to retry the case, we expect him to be acquitted. The additional evidence will establish beyond any doubt that Mr. Nacchio did not commit a crime.”

Nacchio’s conviction on 19 counts of insider trading to the tune of $52 million had been considered the largest insider trading prosecution in U.S. history.

Prosecutors have applied for an extension of a two-week deadline to appeal the decision, saying that U.S. Solicitor General, Paul D. Clement, will need time to consider all aspects of the case and reach a final decision about what to do next.

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