Mar 20, 2007 10:56 pm US/Mountain
Nacchio Attorney: Charges Are 'Totally False'
Former Qwest CEO Charged With 42 Counts Of Insider Trading
by Rick Sallinger
DENVER (CBS4) ―
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Former Qwest CEO Joe Nacchio arrived at the federal courthouse in Denver Monday morning, March 19, 2007 for the start of jury selection in his insider trading trial
CBS
Opening statements in the case against Qwest Chief Executive Officer Joe Nacchio began Tuesday and Nacchio's defense attorneys were quick to say the charges against him are totally false. But the government prosecutor called Nacchio a cheater.
If it was the intent of the government to keep it simple for the jurors, they succeeded. But the defense painted a picture of Nacchio as an honest man, who at times during the opening statements, was brought to tears.
A jury of 11 men and 7 women, including alternates, was selected. Government prosecutor James Hearty wasted no time in telling them, "This is a case about cheating."
Hearty said at the beginning of 2001, Qwest was in risk of not meeting its
growth targets.
"Inside Qwest, Nacchio knew of those risks," Hearty told the jury. "Outside of Qwest, investors didn't."
To emphasize, Hearty played a tape of a 2001 phone call with analysts in which Nacchio stated, "Let me be perfectly clear. We are affirming our targets for 2001."
Prosecutors claim Nacchio sold $100 million worth of Qwest stock based on insider information. Hazel Floyd was one of the company retirees whose members held Qwest.
"That stock just went downhill and they lost all that money and there was no way they could revive," Floyd said.
For the defense, former federal judge Herbert Stern told the jurors the charges in the case were absolutely false. He stated his client believed in Qwest's financial goals.
"He stood behind them with his personal wealth and his children's money," Stern said.
At one point, Nacchio appeared to cry when mention was made about one of his sons who was suffering serious emotional problems at that time.
After opening statements, the government called its first witness, former Qwest investor relations director Lee Wolfe. Wolfe said the golden rule at Qwest was not to say anything that might bring the stock price down.
The government will present more witnesses Wednesday. The trial is expected to last more than seven weeks.
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