Securities Law

Ex-CEO Nacchio’s Prosecution ‘Unprecedented,’ Appeal Says

Former Qwest Communications CEO Joseph Nacchio contends in a brief seeking to overturn his insider trading conviction that his optimism about the company’s financial outlook was not unfounded.

The brief was filed yesterday with the 10th U.S. Circuit Court of Appeals in Denver, the Wall Street Journal reports. “Despite the vicissitudes of the stock market and the economy, [Nacchio] believed more than anyone else in the company’s future,” the brief read.

The appeal contends the jury should have been allowed to consider classified evidence that the company was expected to sign lucrative government contracts.

Nacchio was convicted of insider trading for selling $52 million in Qwest stock while failing to disclose the company’s financial problems. He was sentenced to six years in prison and ordered to pay $71 million in fines and restitution for his insider trading conviction.

The Wall Street Journal Law Blog quotes more passages from the 58-page brief, including this one: “The prosecution yoked an unprecedented theory to plainly insufficient facts, and hoped, in a bitter and vindictive atmosphere, that it would be enough to win a conviction from a Denver jury. It was.”

The brief was written by appellate lawyer Maureen Mahoney, who is known for always eating a doughnut before oral arguments, the Law Blog says.

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