A US federal appeals court ordered a new trial for former Qwest CEO Joe Nacchio, saying the trial judge wrongly excluded expert testimony important to Nacchio's defence in his insider trading case, an Associated Press report said. The court also ordered a new judge to hear Nacchio's case,.
Nacchio was convicted in April 2007 on 19 counts involving the sale of €32.9 million (US$52 million) worth of Qwest stock in 2001. He was sentenced to six years in prison, but remained free on appeal. Jurors acquitted Nacchio of 23 other counts. Prosecutors argued Nacchio sold the stock when he knew that Denver-based Qwest was at financial risk, but didn't tell investors.
The Associated Press report said US Attorney Troy Eid had called the case the largest insider trading prosecution in the nation based on the number of counts, the amount of money involved and the length of the prison term. 'This is a setback, not a defeat,' Eid said in a statement. 'The good news is the circuit court said our trial team presented sufficient evidence to convict Mr Nacchio of insider trading.'
Nacchio's attorney Maureen Mahoney couldn't immediately be reached by telephone for comment.
Attorneys for Nacchio told the 10th US Circuit Court of Appeals in December the case against him didn't meet standards set by previous court rulings. Mahoney also told the court that US District Court Judge Edward Nottingham wrongly prevented defence witness Daniel Fischel from testifying.
In the late 1990's Nacchio, famously told The Economist newspaper that his network costs were so low that, "I can sell [2.4 Gbit/s] circuits at such amazing profit that if I wanted to achieve better margin through diversification, I'd have to import illegal drugs."