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Court overturns conviction of ex-Qwest chief
2008-03-17
A US appeals court on Monday overturned the conviction of the former chief of imploded telecoms giant Qwest Joseph Nacchio and sent the case back to court. The 10th Circuit Court of Appeals in Denver ruled that the exclusion of key testimony from an expert defense witness during Nacchio's hearing last year had resulted in an unfair trial. "The improper exclusion ... prejudiced Mr Nacchio's defense so we must reverse his conviction," the three-judge panel ruled in a written opinion. "However because the evidence the government presented was sufficient, the government may try him a second time." Prosecutors described the ruling as a "a setback not a defeat." "The good news is the Circuit Court said our trial team presented sufficient evidence to convict Mr. Nacchio of insider-trading," US Attorney Troy Eid said in a statement. "We're considering all our legal options in consultation with the Department of Justice." Nacchio was convicted in April on 19 of 42 counts of insider trading resulting from the sale of 2.5 million shares in early 2001 and was later sentenced to six years in jail and ordered to pay back 71 million dollars. Prosecutors had alleged Nacchio sold Qwest stock despite knowing the company would have trouble reaching a five-year plan to grow annual revenues by between 15 percent and 17 percent. But rather than telling investors about the internal doubts over the projections, prosecutors said Nacchio kept reiterating that the company was sticking by its revenue targets. When Qwest's share prices later plummeted, thousands of shareholders -- including many current and former employees -- lost money, in some cases their entire retirement savings. Nacchio was one of many executives who made questionable decisions at the expense of companies, boards and employees during the 1990s boom. Enron boss Jeffrey Skilling pulled a 24-year prison term last year, and WorldCom chief Bernard Ebbers was handed a 25-year sentence.
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