12 August 2009

No Appeal For Nacchio Sentencing Ruling

The Department of Justice has decided not to appeal a recent ruling of the United States Court of Appeals for the 10th Circuit concerning loss calculations used in sentencing and forfeiture determinations in connection with the insider trading conviction of Former Qwest CEO Joe Nacchio.

My estimate is that Nacchio will get to keep about $7.4 million that was going to be subject to forfeiture, and will probably get a couple of years trimmed from his current prison sentence of six years. The Justice Department could eke out a few more months of prison time if they devoted serious effort to testimony on loss causation, but it isn't clear that this is worth the effort involved unless it is needed for a pending civil SEC enforcement action anyway. Resolution of the civil action will likely cost Nacchio millions more than he has already given up in the criminal action.

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