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February 25, 2009

En banc Tenth Circuit reinstates insider trading conviction of former Qwest CEO Nacchio

Though not technically a sentencing ruling, the white-collar sentencing world should surely take note of the Tenth Circuit's decision today, via a 5-4 en banc ruling, to reinstate Joe Nacchio's federal criminal insider trading conviction.  This post from the WSJ Law Blog provides some details (noting some sentencing realities) and useful links:

In a squeaker of a decision, the full Tenth Circuit earlier today upheld former Qwest CEO Joseph Nacchio insider trading conviction, offering another setback to the former telecom high flyer’s attempt to reverse a jury’s decision in 2007.  The court also revoked his bail, so Nacchio is likely headed to prison in the near future. Click here for the ruling; here for the Denver Post’s account.

Nacchio was convicted nearly two years ago of 19 counts of insider trading for selling off Qwest’s stock even as he knew the Denver-based telecom company’s finances were heading south.  Since then he’s been fighting the conviction, with the help of his high-profile attorney, Latham & Watkins’s Maureen Mahoney.  Nacchio has been free on a $2 million bond since then, and has spent toggling between his New Jersey and Florida homes.

In a 5-4 vote, the appeals court overturned an initial three-judge panel’s decision to grant Nacchio a new trial....  Former U.S. Attorney Troy Eid, who oversaw the case but recently left to become partner at Greenberg Traurig, was ebullient about the decision. “It’s a tremendous day for the United States government,” he said. “I couldn’t be happier.”

Maureen Mahoney [has now said]: “We are profoundly disappointed by the Court of Appeals’ closely divided en banc decision. . . . We are optimistic that the Supreme Court of the United States will review the case, not just to resolve the conflicts but to correct what the chief judge of the Court of Appeals described as a ‘draconian decision’ to deprive Nacchio of his fundamental right to a defense. . . ”

February 25, 2009 at 03:58 PM | Permalink


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A high-quality Judge McConnell dissent from the decision you're challenging is always helpful when writing a cert petition.

There's no obvious circuit split here, but this is a big case and a 5-4 split in the en banc court is a signal that this may deserve the Supreme Court's attention.

As the last paragraph of the dissent notes, one way or another, this case isn't over.

My gut tells me that Nacchio deserves to hang, but if Judge McConnell's right, then that question can be answered by the jury on retrial.

Posted by: ab | Feb 25, 2009 4:11:39 PM

The last paragraph I referred to is Judge Henry's dissent, not McConnell's... my mistake.

McConnell's goes from pp. 53 to 96, Kelly's is at 97-98, and Henry's is the last 5 pages.

Posted by: ab | Feb 25, 2009 4:15:55 PM

I am a pro se litigant who had a miserable experience with Judge Nottingham. He adopted a disputed magistrate's report, after the defense counsel billed for ex parte conferences, without making any findings of fact or law. When I tried to get a hearing before another court, he put me in jail for 5 months without a finding that I committed an offense. He appointed an insurance defense lawyer as prosecutor even though that was prohibited by the Supreme Court in YOUNG v. UNITED STATES EX REL. VUITTON ET FILS S. A. ET AL., 107 S. Ct. 2124, 481 U.S. 787 (U.S. 05/26/1987). The prosecutor, Christopher Beall a partner at Faegre & Benson, said I had no right to a lawyer nor to an evidentiary hearing. I was someone convicted without an arraignment or a plea or a right to confrontation or being told the offense. DOJ did not appear except in the form of Marshals with guns and clubs. The Marshals held me for 5 months on a non existent federal offense number with a non existent case number and claimed that I pled guilty although I did not, there was no discussion that I did, and I didn't sign anything nor make a plea in court. Then Nottingham ordered me to pay the insurance defense counsel $102,000 without a Rule 11 c. 6 order, a hearing, or any findings of fact. One of the law firms Nottingham ordered me to pay didn't even exist at the time I supposedly filed documents that for reasons unknown to me he claimed were "frivolous". The magistrate said dismissal of an unserved complaint causes claims preclusion and that all government officials, all their employees and relatives, all lawyers, and all newspapers have qualified immunity. I have no criminal record and was not accused of fraud with any particularity.

Since I don't have Nacchio's money, and am not a lawyer, some people think what I think is unimportant. However, it may be useful to Nacchio that the 10th Circuit seems really set on affirming Nottingham's rulings. Although we were denied our mandatory right to an oral hearing on award of attorney fee shifting, as well as all other motion hearings and affidavits, and the magistrate made statements not supported by evidence, the 10th has ruled that I don't have a right to a post judgment hearing and that the transcripts of Nottingham's six post judgment contempt of court hearings cannot be considered in court. It seems that the 10th Circuit doesn't want to have any hearings about Nottingham's honesty or adherence to procedures in open court. I personally think that when the 10th Circuit found that Nottingham asked a prostitute to lie to investigators and lied to investigators about his government computer that they impeached him. Why should we take Nottingham's unsupported word about anything?

In December 09, per Col Secretary of State, Nottingham formed a Limited Liability Company, so who knows what he is up to behind the scenes?

Posted by: kay sieverding | Feb 26, 2009 7:21:51 PM

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