DENVER—A court ruling Wednesday reinstating the insider-trading conviction of Joe Nacchio doesn’t end the former Qwest chief executive officer’s legal battles.
Nacchio’s attorney has implied she will appeal the decision by the 10th U.S. Circuit Court of Appeals. Meanwhile, a civil complaint brought by the Securities and Exchange Commission against Nacchio and other former Qwest Communications International Inc. employees in 2005 is still pending.
The SEC alleges that Nacchio and four others orchestrated a financial fraud that forced the Denver-based telecommunications company to restate $2.2 billion of revenue.
Don Hoerl, regional director of SEC, said it was too early to say how the ruling might affect the lawsuit. “I think we’re assessing what, if any, impact it might have,” he said.
The appeals court ruling reinstated Nacchio’s conviction on 19 counts of insider trading. Prosecutors said Nacchio sold $52 million of stock in 2001 based on nonpublic information that the company was at risk.
J. Robert Brown, who teaches corporate and securities law at the University of Denver, said he expected few impacts on the SEC lawsuit, whose allegations are of fraud instead of insider trading.
“If somehow the court had terminated criminal proceedings and exonerated Nacchio, that would have been a psychological blow to the SEC,” he said.
Named in the SEC lawsuit are Nacchio, former Chief Financial Officer Robert Woodruff, former President Afshin Mohebbi, and former accountants Frank Noyes and James Kozlowski.
Attorney Kevin D. Evans, representing Kozlowski, said that in light of the reinstated conviction, he was exploring whether to renew an earlier motion seeking a separate trial for his client.
“None of those allegations that Nacchio was convicted on happened while my client was even at Qwest,” he said.
Brown said the ruling could strengthen the argument for separate trials, but he said it was unlikely such a motion would be granted.
“The cost and time involved in trying what will essentially be the same fraud case, albeit with different people with different responsibilities, will outweigh judicial notions that it’s a good idea,” he said.
A trial date has not yet been set in the SEC case.
Attorneys for other defendants either were unavailable for comment or did not return phone messages.
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AP Business Writer Sandy Shore contributed to this report.
