Live Blogging Joe Nacchio Oral Arguments

Update: Nothing on classified information or telecoms and NSA surveillance requests. Neither side brought it up.

I'm in the courtroom at the Tenth Circuit Court of Appeals waiting for oral arguments to begin in the appeal of former Qwest CEO Joseph Nacchio who was convicted earlier this year of insider trading. I'll be live-blogging over at 5280.com for as long as my batteries and internet connection last.

Update: Conclusion: This is no slam dunk for the Government, particularly on whether Judge Nottingham erred in excluding expert defense witness Fischel without a Daubert hearing and perhaps on the materiality instruction. The judges were definitely harder on the Government than on Maureen Mahoney. You can't predict the outcome of an appeal based on the questions. Still, two of the judges seemed more favorable to the defense than the government on the materiality issue and all three had problems with the exclusion of the defense expert witness without a Daubert hearing. If I were Nacchio, I'd be cautiously optimistic. If I were the Government, I'd be concerned. But no one has a crystal ball and everyone will have to wait until the opinion is rendered.

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    the link to 5280.com/blog (none / 0) (#1)
    by scribe on Tue Dec 18, 2007 at 02:38:02 PM EST
    you posted above comes back "not found", though the link within the "not found" page to the main 5280.com page opens correctly.

    From the looks of it on the live blog, (none / 0) (#2)
    by scribe on Tue Dec 18, 2007 at 03:56:47 PM EST
    I'd suppose the Judge's denial of the defense expert and failure to hold a Daubert hearing may well presage a reversal.  My (limited) experience with appellate argument is that, when the judges get all bent out of shape late in the argument over a particular issue and then give the party aggrieved below on that issue more time, they're kinda likely to rule in favor of that aggrieved party.  And, it's a relatively "easy" way for an appellate panel to dispose of a case without making too much precedent or going against too much precedent to get to the result they want.

    thanks, link fixed and (none / 0) (#3)
    by Jeralyn on Tue Dec 18, 2007 at 06:33:23 PM EST
    typos corrected. I may have more to fill in later.

    i read the one over at 5280 -- the mile high. . . (none / 0) (#4)
    by the rainnn on Tue Dec 18, 2007 at 07:16:02 PM EST
    and i'll admit that i'm disappointed to
    learn none of the "classified information/
    punished for refusing to violate the
    " discussion was held in open oral
    argument. . .

    that said, if it is accurately-reported
    that Qwest, under Nacchio, had differing
    internal v. external estimates -- nacchio may well lose.

    the law has evolved to the point where
    judges (to say nothing of the SEC!) are
    deeply disapproving of one set of numbers
    for "the street", and another set, for "inside" the company.

    that alone could tank the presumption of
    "good faith; reasonable when made" non-
    action-ablility for projected, or soft, for-
    ward-looking information. . .

    it amounts to a declaration, by the court,
    that nacchio could not, per force, have
    reasonably believed his own projections, if
    he used differing ones, internally.

    finally, the dates of trading really
    do him no favors -- he could have restricted
    his trading to less that the 10b-5(1) planned
    amounts he had earlier agreed to, but my under-
    standing is that his trade volumes EXCEEDED
    his own pre-approved plan. imprtantly, at the time
    he engaged in these larger-than-planned trades,
    he had not disclosed what he knew about the
    increasingly-softening projections.

    without the context of the "govt. retaliation"
    for failing to disobey the law (the proffered
    REASON that his projections did not materialize):
    i.e., that the govt. cancelled the contracts. . .

    it is hard to see how he can win.

    but -- simply because i typed that. . .
    he probably will.


    great stuff, here, j.

    p e a c e

    i must admit, (none / 0) (#5)
    by cpinva on Tue Dec 18, 2007 at 10:39:28 PM EST
    i'm somewhat confused by the failure of nacchio's attorneys to raise the issue of the restricted, classified information, given the noises made about it, during the original trial, and subsequently.

    i'm inclined to agree with rainnn; if the internal & external #'s were materially different, nacchio pretty much cut his own throat, with his own calculator.

    it would be one thing to take a conservative position, for public consumption, and an optimistic position, for internal purposes, and sell, based on that. it's another thing entirely to do the exact opposite.

    frankly, i'm still kind of confused as to how the classified info has any real bearing on the issue at hand, his alleged insider trading.