The insider-trading conviction of Joseph Nacchio, Qwest Communications International Inc.'s former chief executive officer, was reinstated by a federal appeals court in Denver, Bloomberg reported.
Nacchio, who was convicted in 2007 and sentenced to six years in prison, argued that the trial judge improperly excluded testimony by a defense witness at trial. A divided U.S. 10th Circuit Court of Appeals rejected that argument, with five judges saying Nacchio's conviction was proper. Four judges dissented.
The judges weighed whether former U.S. District Judge Edward Nottingham properly excluded some testimony by defense witness Daniel Fischel, a law professor who sought to tell jurors about aspects of Nacchio's trading and the relevance of his inside information. The panel revisited the issue after a three-judge panel in March threw out the conviction and ordered a new trial.
"The district court fulfilled its duty as gatekeeper and did not abuse its discretion in excluding Professor Fischel's expert testimony," wrote the five-judge majority. Nacchio's lawyers "failed to satisfy the district court that Professor Fischel's testimony was reliable."
Nacchio attorney Herbert Stern did not immediately return a call seeking comment.
Nacchio, 59, who was free on bail during the appeal, was convicted on charges he sold $52 million in Qwest shares in 2001 based on inside information. The majority opinion ruled that his bail is revoked and "the stay of Mr. Nacchio's sentence of imprisonment is hereby lifted."