A U.S. appeals court has granted Joseph Nacchio, the former CEO of Qwest Communications International, a new trial, reversing his April 2007 conviction on 19 counts of insider trading.
A three-judge panel of the U.S. Court of Appeals for the 10th Circuit, based in Denver, Colo., ruled that the district court judge who tried Nacchio's case erred by barring Professor Daniel Fischel, a University of Chicago law professor, from testifying. Nacchio's lawyers wanted Fischel to testify about the ex-CEO's stock trading patterns.
Nacchio was sentenced in July to six years in prison and ordered to pay $19 million in fines, as well as repay $52 million from past stock trades. He was indicted in December 2005 on 42 counts of insider trading.
Nacchio, CEO at Qwest from January 1997 to June 2002, was accused of using insider information to sell $100.8 million worth of stock between January and May 2001. Nacchio was tried in U.S. District Court for the District of Colorado.
Nacchio resigned in 2002 from Qwest, a telecommunications provider that serves several states in the West and Midwest, amid concerns from shareholders about his $27 million annual compensation package.
In 2005, the U.S. Securities and Exchange Commission charged him and other Qwest executives with fraud, saying they misrepresented one-time sales of network capacity as recurring revenue in order to boost the company's stock price. Nacchio unloaded his own stock while predicting strong growth, all the while knowing about problems with Qwest's performance, the U.S. government charged.
Nacchio's lawyer wasn't immediately available for comment.
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