Mar 26, 2007 3:04 pm US/Mountain
Nacchio's Lawyers Ask For Mistrial
Former Qwest Finance Chief Testifies For Prosecution
Former Qwest CEO Charged With 42 Counts Of Insider Trading
DENVER (CBS4/AP) ―
Attorneys for former Qwest CEO Joe Nacchio asked for a mistrial Monday in his insider trading trial. The defense argued that jurors should not have heard testimony last week from a former Qwest employee.
Sally Anderson testified she upped her investment in company stock after receiving an optimistic e-mail from the then-CEO.
Defense attorneys said in a filing Monday that the testimony was improper. Anderson testified only about stock purchases in 2000, Nacchio's lawyers noted, not 2001 — the time in which Nacchio is charged with 42 counts of insider trading. His attorneys have argued that relevant "victims" are people who bought the stock that Nacchio sold.
Prosecutors said they will respond to the motion within one or two days. Nottingham will rule on the issue after that time.
Meantime, a former Quest Communications finance chief testified Monday that Nacchio put a top priority on meeting revenue targets despite concern from midlevel managers they might not meet the goals.
Robin Szeliga said she met with Qwest's then current chief executive officer and her boss in late December 2000 or early January 2001 to discuss concerns that had been raised by executives of Qwest's business units.
Szeliga said Nacchio told her he would make the decisions as to whether the business units had valid concerns.
Szeliga also said Monday she has reached an agreement in a civil fraud case stemming from the company's accounting scandal.
Szeliga, Nacchio and other one-time executives are accused of orchestrating a financial fraud at the telephone company. Qwest Communications International Incorporated was forced to restate billions of dollars in revenue as a result of the accounting scandal.
Szeliga said she has agreed to pay $577,000 in fines, restitution and other penalties without denying or admitting guilt. She also is banned for life from being an officer or director of a public company.
Szeliga said the agreement has been approved by the Securities and Exchange Commission which brought the suit.
Prosecutors questioned a former Qwest legal director earlier Monday and showed jury members complex federal forms outlining stock sales.
Kamelia Oneth was a legal affairs director at Qwest when Nacchio was the company's CEO. Jurors peered closely at the forms on computer screens as Oneth explained how the forms were filed and detailed the company's insider trading policy.
Nacchio, 57, is Qwest's former chief executive officer, who's accused of dumping $101 million in stock when he found out the company was trouble.
Soon after, Qwest became mired in an accounting scandal that eventually forced it to restate $2.2 billion in revenue.
Nacchio resigned from Qwest under pressure in 2002.
The trial resumed Monday after being recessing late Thursday.
The defense contends Nacchio was aware of secret, potentially lucrative government contracts that Qwest could win, and that the money would help the company's financial picture.
Prosecutors said Nacchio ignored questions about the income projections.
Nacchio has pleaded not guilty to 42 counts of insider trading.
He could face up to 10 years in prison and a $1 million fine on each count if convicted.
(© 2007 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
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