DENVER (AP) – A Supreme Court review of the insider trading conviction of former Qwest CEO Joseph Nacchio is unwarranted, government attorneys argued in a brief filed with the high court.
Nacchio has started serving a six-year prison sentence while he appeals his 2007 conviction on 19 counts of insider trading. Prosecutors said he sold $52 million worth of stock in 2001 based on nonpublic information that Denver-based Qwest Communications International Inc. might miss its sales targets. He was acquitted of 23 insider trading counts.
Nacchio has argued that the alleged insider information he held was from immaterial, internal risk assessments that didn't have to be publicly disclosed. Qwest's internal sales goals were higher than ones announced publicly.
Government attorneys argued in a brief filed late Friday that jurors' conclusion on materiality was reasonable. "Petitioner himself predicted a 15 percent to 20 percent drop in Qwest's stock price if the company missed targets by as little as 0.2 percent," they wrote.
Nacchio also has argued that jury instructions on materiality were improper and that testimony that would have helped his defense was improperly barred at trial. Prosecutors disagreed.
Four groups have filed friend-of-the-court briefs supporting Nacchio's appeal. Appeals court judges have disagreed on his case.
A three-judge panel of the 10th U.S. Circuit Court of Appeals granted Nacchio a new trial last year in a 2-1 ruling on grounds that the trial judge improperly barred expert testimony on materiality and stock price movements. But the full appeals court reinstated the conviction in a 5-4 ruling in February, saying the judge was within his discretion.
Nacchio's attorneys and prosecutors disagree on whether the 10th Circuit ruling conflicts with rulings of other federal appeals courts.
Nacchio reported to the minimum-security satellite facility of the Federal Correctional Institution, Schuylkill in Minersville, Pa., on April 14 to start serving his sentence.