Defense attorney Herbert Stern began his closing argument in the insider trading case against his client by asking the jury “to acquit Joseph Nacchio.”
“He is not guilty,” Stern said.
Stern spoke for about an hour before the jury was dismissed for the day. He will continue his closing argument Wednesday. Stern will be followed by prosecutor Cliff Stricklin’s rebuttal closing.
The jury will then receive their instructions and begin deliberating.
During the first hour of his closing, Stern stated that “a person trades on the basis of inside information if the government proves beyond a reasonable doubt that that person actually used material, nonpublic information in deciding to trade.”
“The fact of the matter is Joe Nacchio had no material, insider information,” Stern said.
Stern followed government prosecutor Colleen Conry, who concluded her statement by reiterating that Nacchio “chose not to tell and to sell,” and she asked the jury to return a “verdict of guilty on all 42 counts.”
During her closing, which lasted approximately one hour and 45 minutes, Conry highlighted several notable quotes from former Qwest executives, such as former executive Gregory Casey telling Nacchio that they’ve “drained the pond” on one-timers.
Both the courtroom and an overflow room are packed with onlookers.
Prior to the start of closing arguments, David Weinstein, the final witness, testified that he spoke to Nacchio on Nov. 3, 2000, but Nacchio didn’t tell him that he was signing a document permitting the sale of stock.
In another phone call on Nov. 27 Nacchio again said nothing about selling the stock, Weinstein said.
Prosecutors claim that in reality, Nacchio had the document back dated when he made the decision to sell the shares later. They claim he did so because, by the time he did sell the stock, he had information about Qwest’s financial health that wasn’t public and that possession of that information made the sales illegal.
Weinstein also testified that in a subsquent phone conversation with Yosh Rana, a lawyer for Qwest who helped Nacchio with the sales, Rana told him that Nacchio had made an “irrevocable election to sell” about $14 million in shares on Nov. 3.
Earlier in the day, U.S. District Judge Edward Nottingham worked with attorneys on both sides of the case to craft jury instructions that will be given to jurors following closing arguments.
Among the things the jury will hear is that Rana, a former Qwest lawyer who worked with Nacchio who was listed as a possible witness, won’t appear. They will not be told the reason – that Rana has said he will plead his Fifth Amendment right to not answer questions.
Prosecutors have refused to grant Rana immunity for his testimony, Nottingham said.
Jurors will be told that he is unavailable to either side.
The prosecution has hinted that Rana was involved in alleged backdating of a stock sale instruction by Nacchio. The government alleges that Nacchio had the form backdated from early December 2000, when he actually issued the instruction, to November 3, 2000, before he had received repeated warnings that the company was headed for financial disaster, in order to sidestep laws that bar a company officer from selling stock when he has important, non-public information about the company’s finances.
