Ex-Qwest chief ordered to respond to appeal review request
DENVER—Three appeals court judges who overturned former Qwest chief Joe Nacchio's insider trading conviction asked him Thursday to respond within two weeks to a government request seeking a full appellate review of their decision.
The 10th U.S. Circuit Court of Appeals judges gave Nacchio until May 15 to answer government arguments revolving around a judge's authority over expert witness testimony.
Neither federal prosecutors nor Nacchio's attorneys would comment on the development.
Nacchio was convicted in April 2007 of 19 counts of illegally selling $52 million worth of stock in 2001 after prosecutors argued he made the trades when he knew Qwest Communications was at risk but didn't tell investors. The jury acquitted him on 23 counts of insider trading.
Nacchio was sentenced to six years in prison but has remained free on appeal.
The three-judge panel overturned Nacchio's conviction in a 2-1 decision in March, concluding U.S. District Judge Edward Nottingham improperly excluded testimony from defense expert witness law professor Daniel Fischel and did not give the defense adequate opportunities to disclose the reasons and bases for Fischel's opinions.
The panel also said Nottingham erred in excluding Fischel's economic opinions on the basis that they were within the jury's common knowledge.
Federal prosecutors asked the full 10th Circuit panel to reconsider whether a district judge may exclude expert testimony under certain conditions and whether a judge may exclude expert testimony about economic concepts.
They requested that the panel's ruling be vacated and the conviction reinstated.
If the petition is granted, a review will be conducted by the full court, which typically is 12 judges in the 10th Circuit.
The case grew out of a multibillion-dollar scandal that forced the Denver-based telecom to restate $2.2 billion of revenue. Federal regulators have said Qwest falsely reported fiber-optic capacity sales as recurring instead of one-time revenue between April 1999 and March 2002.
Nacchio still faces a civil fraud lawsuit filed by the Securities and Exchange Commission against him and four other former Qwest employees. The SEC alleges they coordinated a financial fraud that allowed Qwest to improperly report about $3 billion in revenue.
