(Associated Press via NewsEdge) Former Qwest CEO Joe Nacchio, on trial for insider trading, attempted to hide $90 million by transferring stock into accounts held solely by his wife, according to a prosecutor motion.
In the motion filed outside the jury's presence, prosecutor Kevin Traskas asked for permission to introduce evidence about the February 2002 transfer to counter the defense's contention that Nacchio did not sell personal shares of Qwest from 2001 through 2002.
Defense attorney Herbert Stern filed a motion stating that the asset transfer occurred after the time period in which Nacchio is accused of insider trading so it was irrelevant.
Nacchio has acknowledged exercising stock options in the first five months of 2001 to earn $101 million, which are the transactions at issue in the trial.
Prosecutors say Nacchio sold the stock while knowing Qwest faced financial troubles that could affect its share price. The defense says Nacchio had to exercise stock options under terms of his contract, but was optimistic about the company's future because he anticipated lucrative contracts with clandestine government agencies.
Nacchio, who resigned under pressure from Qwest Communications International in 2002, is accused of 42 counts of insider trading. Each count carries a penalty of up to 10 years in prison and a $1 million fine.
In his motion, Traskas said the government would have David Weinstein, a financial consultant to Nacchio, testify that Nacchio transferred more than $90 million in assets, including Qwest securities, from accounts in his name or held jointly with his wife, into accounts held solely by his wife.
Nacchio was motivated by a 'desire to hide his assets' and 'to avoid suffering a loss, which bears strong similarity to the desire that motivated his insider sales several months before,' Traskas alleged.
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