10th Circuit Reinstates Nacchio Conviction, Jail Sentence

In a split decision, the 10th Circuit, en banc, has reinstated the insider trading conviction and 6 year prison sentence of former Qwest CEO Joe Nacchio. It also revoked his bail. The 104 page opinion is here (pdf.)

The 5-4 decision by the full 10th U.S. Circuit Court of Appeals reinstates Nacchio's conviction and his six-year prison sentence and revokes his release on $2 million bond.

....Nacchio was convicted in 2007 on 19 counts of insider trading for illegally selling $52 million worth of stock six years earlier, after company insiders warned him that Qwest could not meet its financial targets.

The issue was the trial court's exlcusion of Nacchio's expert witness. [More...]

Fischel was prepared to present a study of Nacchio's trading patterns that showed they were inconsistent with insider trading.

But the majority noted on Wednesday that Nacchio's attorneys first disclosed plans to call Fischel three days before the start of trial, giving the government inadequate time to review Fischel's qualifications and opinions.

"The district court's exclusion of the testimony was not arbitrary, capricious, whimsical, or manifestly unreasonable; nor are we convinced that the district court made a clear error of judgment," the majority justices wrote.

The dissenting judges said:

[D]efense attorneys should not have been penalized for "an understandable and inconsequential mistake." "Not every violation of procedural rules warrants the nuclear option of disallowing the defense to present its case," the dissenters wrote.

The case now goes back to the three judge panel to address Nacchio's arguments about the length of his sentence and amount of restitution.

I would have ruled for Nacchio, for the reasons expressed here. All of my Nacchio coverage is available here. My live-blogging of the trial on the days I attended is available at 5280.com.

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  • Display: Sort:
    not sure how i feel about this. (5.00 / 1) (#1)
    by cpinva on Wed Feb 25, 2009 at 02:11:24 PM EST
    on the one hand, i have little sympathy for mr. nacchio, and his overweaning greed.

    on the other hand, he should have been allowed to present what he and his attorneys considered his best defense. if that required giving the gov't more time to vet his expert witness, then so be it. it's not like he was going anywhere.

    every defendant, no matter how regugnant, should be given every opportunity (assuming it's relevant) to present all witnesses and exhibits at trial.

    i'd rather he'd been allowed his expert witness, and the gov't destroyed him on cross, than him being able to legitimately claim he wasn't given a full chance to present his case, as i would for anyone.

    I regained a little sympathy (5.00 / 2) (#2)
    by eric on Wed Feb 25, 2009 at 02:20:58 PM EST
    for this guy once I heard that Qwest was the only telecom that refused to comply with Bush's wireless wiretapping program.  I have even heard it alleged that he was targeted for this reason.

    BushCo Rules (5.00 / 1) (#3)
    by squeaky on Wed Feb 25, 2009 at 02:24:40 PM EST
    Your are either with us or against us. Nacchio was against breaking the law for BushCo and paid the price.

    that said, (none / 0) (#6)
    by cpinva on Wed Feb 25, 2009 at 03:50:46 PM EST
    Nacchio was against breaking the law for BushCo and paid the price.

    it would appear he wasn't averse to breaking it, for the purpose of lining his own pockets.

    again, i think both the trial court and 10th circuit made a huge mistake in not allowing the expert witness. if nothing else, it provided clear grounds for appeal up the chain.

    it also does not bode well for any future defendants.


    more on that (none / 0) (#4)
    by Jeralyn on Wed Feb 25, 2009 at 02:25:04 PM EST
    The Daubert ruling (none / 0) (#5)
    by Big Tent Democrat on Wed Feb 25, 2009 at 02:51:37 PM EST
    Did they uphold the trial court's Daubert ruling?

    Yes. Starting at page 46: (none / 0) (#9)
    by oculus on Wed Feb 25, 2009 at 05:05:09 PM EST
    That this is political payback (none / 0) (#7)
    by weltec2 on Wed Feb 25, 2009 at 03:58:27 PM EST
    bothers me more than whatever crimes Joe Nacchio did or didn't commit. More of the Nixon/Bush legacy in operation.

    "Whatever crimes he may have committed" (none / 0) (#8)
    by coast on Wed Feb 25, 2009 at 04:29:49 PM EST
    You may want to look up what he did before judging the reason for the investigation.  The man committed a multibillion dollar fraud for no other reason than to enrich himself.  I could care less the reasons for why the investigation began.  Fact is he was dirty and he got caught.  I agree with cpinva though, he should have been given every opportunity to defend himself, as anyone should be allowed to do.  I doubt any additional defense would have made a difference IMO.

    Thanks for the clarification. (none / 0) (#10)
    by weltec2 on Wed Feb 25, 2009 at 05:21:23 PM EST
    You may want to look up what he did before judging the reason for the investigation.