Qwest CEO who snubbed NSA headed back to court

A federal appeals court said on Wednesday it will reconsider its decision overturning the insider trading conviction of former Qwest Communications International Inc Chief Executive Joseph Nacchio.

In appealing his 2007 conviction on insider trading charges, Nacchio argued that the government had retaliated against him by withdrawing lucrative contracts after he refused to participate in a National Security Agency program he believed was illegal. It's unclear precisely what NSA programs were discussed in a February 2001 conversation between Nacchio and representatives of the ultra-secret spy agency.

Nine judges on the 10th U.S. Circuit Court of Appeals granted a request from prosecutors for all of them to rehear Nacchio's appeal, which a three-judge panel of the court had decided 2-1 in Nacchio's favor on March 17. The nine judges gave no reason for their decision.

Nacchio's April 2007 conviction on 19 counts of insider trading had been hailed as a major victory in the government's attempt to crack down on corporate titans who profited while their companies suffered serious financial setbacks.

The telecom ex-CEO was convicted of illegally selling $52 million worth of stock in 2001 after, prosecutors alleged, company insiders warned him Qwest could not meet its financial targets.

The two judges who overturned the conviction concluded Nacchio did not get a fair trial because the trial judge improperly barred testimony from an expert witness the defense considered key to its case.

Prosecutors, in asking the higher court to reconsider, contended the March 17 decision improperly restricted a judge's discretion to exclude "unsupported expert opinions and unnecessary economic commentary."

The Denver-based appeals court said it would hear oral arguments on September 24. The judges told Nacchio's attorneys and prosecutors to submit within 30 days written briefs addressing four issues about the exclusion of the testimony of the expert witness.

Nacchio's attorneys said they were confident the full panel would concur with the decision by the three-judge panel.

"The trial court excluded evidence that would have established Mr. Nacchio's innocence," attorney Maureen Mahoney said in a statement. "The panel concluded that the trial was unfair and we expect the en banc court to agree."

Troy Eid, U.S. Attorney for Colorado, said in a statement that prosecutors, "will keep working to ensure that justice is done."

With wire reports