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Defense: Investor testimony should prompt mistrial

Published March 26, 2007 at midnight

Joe Nacchio's defense attorneys filed a motion for a mistrial today, saying jurors should not have heard testimony last week from a former Qwest employee who said she upped her investment in company stock after receiving an optimistic e-mail from the then-CEO.

Sally Anderson told jurors she had been putting half of her savings in Qwest stock, until a September 2000 e-mail in which Nacchio outlined new initiatives and said the company was raising revenue targets. Under cross-examination, she indicated she was among a group of employees who later lost "a lot" of money when the stock went south.

Defense attorneys said in today's filing that the testimony was improper, and that similar so-called "victims" should not be allowed to testify. Anderson testified only about stock purchases in 2000, they noted, not 2001 — the timeframe in which Nacchio is charged with 42 counts of insider trading. They say the only relevant "victims" are people who bought the stock that Nacchio sold.

Judge Edward Nottingham already has ruled that testimony about investors' losses is not allowed at trial. That's because to prove insider trading, prosecutors don't have to prove that Nacchio's sales negatively impacted anyone. They must show only that he sold while in possession of non-public, material information, and with the intent to defraud or cheat. Testimony like Anderson's, defense attorneys say, serves only to prejudice the jury against Nacchio.

Prosecutors said they will respond to the motion within one or two days. Nottingham will then issue a ruling.

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