Opinion ID: 3061983
Heading Depth: 2
Heading Rank: 4

Heading: Prosecution and Trial

Text: In December 2003, Mr. Nacchio was indicted and charged with 42 counts of insider trading. The government alleged that Mr. Nacchio’s sales from January to May 2001 were on the basis of inside information, because he had material 2 See http://money.cnn.com/quote/historical/historical.html?symb=INDU; http://money.cnn.com/quote/historical/historical.html?symb=COMP . -10- nonpublic information about Qwest—specifically that the company was relying heavily on IRU sales, a non-recurring source of revenue to meet its first and second quarter public guidance, and that the company had not made the needed shift to recurring revenue which placed the company at substantial risk of not meeting its year-end guidance. After a sixteen-day jury trial, the jury deliberated for six days and convicted Mr. Nacchio on the nineteen counts of insider trading covering his trades in April and May 2001. It acquitted him of the counts covering the trades from January to March. The district court then sentenced Mr. Nacchio to six years’ imprisonment on each count, to run concurrently, two years’ supervised release on each count, to run concurrently, fined him $19 million, and ordered him to forfeit over $52 million more. Challenging his conviction, his sentence, and the forfeiture, Mr. Nacchio appeals to this Court. We reverse his conviction and remand the case for a new trial. In Section II, we discuss the evidence that Mr. Nacchio was prevented from using at trial, and explain why the district court’s error entitles him to a new trial. We cannot stop there, however, because the government is entitled to try the defendant a second time only if its evidence at the first trial was legally sufficient. In Section III, therefore, we explain the government’s theory of the case and discuss the sufficiency of the evidence in light of the jury instructions, concluding that a properly-instructed jury could have found the Defendant guilty of insider trading. Finally, in Section IV we discuss the nature of the remand. -11-