DENVER-
A judge Thursday refused to delay a civil fraud lawsuit against Joe Nacchio while the former Qwest CEO pursues post-trial motions stemming from his insider trading conviction.
U.S. Magistrate Judge Craig Shaffer told Nacchio’s attorneys it was in the best interests of the public and the other defendants for the two-year-old case to proceed.
“At this point, I would expect Mr. Nacchio to participate,” Shaffer said. “We cannot continue to litigate this case in such a tentative manner.”
In the criminal case, defense attorneys on Thursday began laying the groundwork for a new trial motion, asking the judge who presided at it for more details on how the prospective jury pool was selected.
At issue is the way U.S. District Judge Edward Nottingham pared the pool of 1,000 down to 78 prospects who were called to court. A panel of eight men and four women selected from the group convicted Nacchio last week.
In addition, prosecutors argued Nacchio should be required to forfeit $52 million, the gross amount he earned on 19 stock sales in April and May of 2001 that drew guilty verdicts.
During the hearing in the civil case, Shaffer said Nacchio will be required to respond to the lawsuit and participate in the evidence exchange process unless his attorneys file a motion that could potentially delay proceedings, such as a request to separate Nacchio from the other defendants.
He agreed to give Nacchio an additional 20 days to meet some pretrial deadlines.
Attorneys for Nacchio and for the Securities and Exchange Commission, which brought the lawsuit, declined comment after the brief hearing.
Nacchio and four other one-time Qwest Communications International Inc. executives have been accused of orchestrating a massive financial fraud that forced the Denver-based phone company to restate $2.2 billion in revenue.
The SEC has said the fraud occurred between April 1999 and March 2002, allowing Qwest to improperly report approximately $3 billion in revenue that helped pave the way for its 2000 acquisition of former Baby Bell U S West.
The SEC wants repayment and civil penalties, with amounts to be determined at trial.
Qwest paid $250 million to settle SEC charges of fraud in a deal that did not cover individuals. Qwest did not admit any wrongdoing in the settlement.
Last week, a jury convicted Nacchio of illegally selling $52 million in stock amid the accounting scandal. He was convicted on 19 counts of insider trading but acquitted of 23 other counts.
He is scheduled to be sentenced July 27. Each count carries a sentence of up to 10 years in prison and a $1 million fine. Nacchio’s attorneys have said they will appeal.
Shaffer previously delayed the evidence exchange process in the civil case while the government pursued its criminal investigation of the accounting scandal because many of the witnesses and the documents were common to both cases.
He lifted some of those delays earlier this month for all of the defendants except Nacchio who was on trial.
During Thursday’s hearing, attorney Joel Silverstein, who represents Nacchio, asked Shaffer to continue a stay in the case to protect Nacchio’s rights as the post-trial proceedings continue in the criminal case.
The other remaining defendants include former Qwest President Afshin Mohebbi, who testified against Nacchio in the criminal trial; former Chief Financial Officer Robert Woodruff; and former Qwest accountants James Kozlowski and Frank T. Noyes.
Former CFO Robin Szeliga and former Qwest executive Gregory Casey have reached separate settlements with the SEC.
