DENVER—Federal prosecutors said Friday an appeals court should affirm Joe Nacchio’s insider trading convictions, arguing that a new trial would “be too drastic.”
Federal prosecutors made their case in a filing to the 10th U.S. Circuit Court of Appeals, which agreed last month to review a decision that overturned Nacchio’s convictions on 19 insider trading counts. A three-judge Appeals Court panel ordered a new trial in March, saying the trial judge improperly barred testimony from defense witness Daniel Fischel, an expert on corporate law and markets. The panel ruled on a vote of 2-1.
Friday at midnight is the deadline for prosecutors and defense attorneys to file briefs presenting arguments on the merits of a review of the panel’s decision. U.S. Attorney’s Office spokesman Jeff Dorschner said he was unaware if Nacchio’s defense attorneys had filed their arguments Friday evening.
Nacchio, the former Qwest CEO, was convicted in April 2007. He was accused of selling $52 million worth of stock when he knew Qwest Communications International Inc. was at risk while other investors did not.
Federal prosecutors said in their filing Friday that Fischel’s exclusion did not substantially affect the verdict, and that defense attorneys failed to show his reliability, despite having more than a year to prepare for trial.
Nacchio’s attorneys argued Fischel would have explained to jurors the legal requirements for public disclosure and that Nacchio’s stock sales were to diversify his portfolio.
Nacchio, who was acquitted of 23 other counts, was sentenced to six years in prison but remains free pending appeal.
