Federal appeals court grants full rehearing of Nacchio insider trading case

[JURIST] The US Court of Appeals for the Tenth Circuit [official website] on Wednesday granted [order, PDF] prosecutors' petition for an en banc rehearing on whether the insider trading conviction of former Qwest Communications [corporate website] CEO Joseph Nacchio [JURIST news archive] should be overturned. In March, a Tenth Circuit panel struck down [ruling, PDF; JURIST report] Nacchio's conviction and ordered a new trial, finding that US District Judge Edward Nottingham improperly excluded testimony from defense witness Daniel Fischel [academic profile], a corporate law and markets expert scheduled to present information on public disclosure requirements for Nacchio's stock sales. Nacchio had appealed his April 2007 insider trading conviction [JURIST report] for selling $52 million of Qwest stock in 2001 based on non-public information shortly before the stock sharply dropped in value. AP has more.

Federal prosecutors indicted Nacchio in December 2005 on 42 counts of insider trading [JURIST report]. He and other former Qwest executives still face civil fraud charges [JURIST report] brought by the US Securities and Exchange Commission [official website] on allegations that Qwest improperly reported approximately $3 billion in revenue that eased its 2000 merger with US West. Another former Qwest employee, ex-vice president Marc Weisberg, pleaded guilty to wire fraud [JURIST report] in December 2005 and helped prosecutors build their case against Nacchio.



 

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