The Court of Appeals has thrown out the convictions of former Qwest CEO Joseph Nacchio and ordered a new trial with a new judge.
CNBC reports that the convictions were overturned because Nacchio was prohibited by the presiding judge and national security laws from presenting a proper defense. This is a stunning rebuke of a case that is at the heart of the illegal wiretap program.
Just broke on CNBC - no wire stories links yet. Will update.
UPDATE: Confirmation from CBS4 in Denver
A federal appeals court ordered a new trial for former Qwest CEO Joseph Nacchio on Monday.
The court said there was an improper exclusion of Nacchio's expert witness merits a new trial.
The court concluded that the evidence before the district court was sufficient for the government to try him again without violating the Double Jeopardy Clause.
The court ordered the trial be presided over by a different judge.
More from the Denver Post:
The 10th Circuit Court of Appeals has reversed the guilty verdict in the insider trading case of former Qwest CEO Joe Nacchio and ordered a new trial before a different judge.
The decision was 2-1 to overturn the verdict.
After a month-long trial in Denver federal court, Nacchio was convicted in April 2007 on 19 counts of insider trading connected to his sale of $52 million in Qwest stock. He was acquitted on 23 other charges.
U.S. District Court Judge Edward Nottingham presided over the District Court trial.
The Post story has more background on the trial, but it doesn't get into the FISA issues. There are a lot of good diaries from the time of that trial if you want to brush up on the details, and I need to refresh my memory before posting what happened at the trial.
But it is exceptionally unusual for an appeals court to both overturn all convictions and order a new trial under a new judge, if the state wishes to prosecute again. That's about as close as an appeals court will get to declaring judicial misconduct in a case.
No word yet if the DOJ will appeal the ruling.
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MORE: Rocky Mountain News review of issues in appeal, from last December
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Requests, I take requests...
From the comments:
You're top recc'd now and I still am trying to figure out the particulars of the case. The links are great but if you could do a quick summary of the case though would be helpful.
Okay. The government says this is about how Qwest's stock tanked in late 2001, and what Nacchio knew about it.
Nacchio was convicted on nineteen counts of insider trading, because the government convinced the jury that he sold millions in stock at a time when he was being privately warned that it would be very difficult for the company to hit its earnings targets. The jury acquitted him on 23 other charges of insider trading.
Nacchio claimed in trial that he sold his stock at the time because he needed cash to exercise options on more Qwest stock. The expert witness that the judge refused to allow to speak on Nacchio's behalf was going to testify to this.
On that level, it was a pretty straightforward insider trading case. What makes this different is why Qwest's stock tanked when it did.
Literally days after Bush took office in 2001, the NSA asked the big US telecoms to allow access to their networks without a warrant. It's been known for a long time that Qwest was the only company that said no because their lawyers believed the program was illegal, but it wasn't known until Nacchio's appeal that this meeting happened almost seven months before 9/11.
Nacchio also said there was a good reason why he was bullish on Qwest during the time he was selling his stock. The company had profited from top-secret government contracts for years and Nacchio expected those contracts to be renewed in 2001. It's widely believed that the government pulled those contracts in retaliation for Qwest refusing to play ball on the warrantless wiretap/data mining program, but for whatever they weren't renewed and this kneecapped Qwest. The stock went into the toilet, taken down in part because Qwest was often being mentioned in the same breath as Enron and WorldCom when they were in their free-falls. Nacchio lost his job soon after and then came the coup de grace - a huge federal indictment on insider trading.
At the trial, the judge ruled that Nacchio could not introduce the top-secret contracts as evidence that he had good reason to believe Qwest was in good shape.
I'm working off memory for some of this, if I've made any errors - let me know.