Court hears arguments over Nacchio conviction

DENVER Thu Sep 25, 2008 8:14pm EDT

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DENVER (Reuters) - U.S. appeals court judges sharply questioned a lawyer for former Qwest Communications International Inc Chief Executive Joseph Nacchio on Thursday during a hearing to determine if his 2007 conviction on insider trading charges should be reinstated.

During oral arguments in an appeal by prosecutors, six of the nine judges of the 10th U.S. Circuit Court of Appeals in Denver appeared to take issue with Nacchio attorney Maureen Mahoney's claim the former telecommunications CEO had an unfair trial because an expert witness vital to his defense was excluded.

The nine-member panel was expected to issue a ruling in the coming months.

Nacchio, 59, was found guilty in April of 2007 on 19 counts of insider trading, a conviction that was hailed as a major victory in the government's attempt to crack down on corporate titans, while their companies suffered serious financial setbacks.

Prosecutors say he illegally sold $52 million worth of stock in 2001 after company insiders warned him that Qwest could not meet its financial targets.

Nacchio was sentenced to six years in prison, but in March, a three-member panel of the 10th Circuit voted to overturn the conviction, ordering a new trial in front of a different judge.

The court criticized U.S. District Judge Edward Nottingham, who presided over Nacchio's trial, for barring testimony from the expert witness, who defense lawyers said was key to their case.

Prosecutors appealed that ruling to the nine-member court and experts have forecast Nacchio's conviction could be reinstated. He is currently free on $2 million bond.

(Editing by Andre Grenon)

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