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Prosecutors ordered to turn over evidence in former Qwest chief's insider trading trial

Prosecutors ordered to turn over evidence in former Qwest chief's insider trading trial

Prosecutors have been ordered to give Joe Nacchio's attorneys any documents they would use to counter the former Qwest chief's potential use of classified government information in his insider trading trial.
A federal judge on Wednesday granted a defense motion seeking the prosecution's evidence, saying prosecutors must comply with laws detailing the fair exchange of evidence when it pertains to classified information.
Nacchio, a former chief executive officer at Qwest Communications International Inc., is scheduled to stand trial March 19 in U.S. District Court on 42 counts of insider trading. He is accused of selling $101 million (euro78 million) worth of stock in 2001 based on inside knowledge that the Denver-based telephone company would be unable to meet revenue targets.
Nacchio has pleaded not guilty and is free on bail. Each count carries a penalty of up to 10 years in prison and a $1 million (euro770,000) fine.
Defense attorneys have said Nacchio believed Qwest would get hundreds of millions of dollars worth of classified government contracts and that gave him hope for the company's financial future.
The defense strategy is based on documents that fall under the Classified Information Procedures Act, which allows attorneys and judges to review such documents behind closed doors to determine if they are significant enough to be used at trial.
U.S. District Judge Edward Nottingham has held two closed-door hearings in the case where those documents were reviewed.
Qwest, the primary phone service provider in 14 mostly Western states, reported total revenue of $19.6 billion in 2001, the year of the trades in question. Of that, $322 million was attributed to federal contracts, and less than half of that came from classified contracts, according to court filings.
Separately, Nacchio also is one of several former Qwest executives accused by the Securities and Exchange Commission in a civil case alleging they orchestrated a financial fraud that forced the company to restate billions of dollars in revenue. That case is pending.


Updated : 2021-06-16 21:48 GMT+08:00