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After five years of missed steps and failed prosecutions, the Denver U.S. attorney’s office believed it had finally carried the day in its fight tobring to justice Joseph Nacchio, the former chief executive of QwestCommunications International Inc. Monday, after a federal appeals court threwout Nacchio’s conviction in a 2-to-1 decision, prosecutors learned they muststart again from scratch. If prosecutors choose to try Nacchio a second time, they will do so withoutthe lawyer largely credited with convincing a Denver jury to convict Nacchioon 19 counts of insider trading in a 2007 trial. Cliff Stricklin, a veteranEnron prosecutor brought in to handle the Nacchio trial in 2006, announcedlast month that he was leaving to join Holland & Hart. Stricklin, who istraveling overseas and couldn�t be reached for comment, will start at hisnew firm on April 1. In issuing its ruling, the court sided with Nacchio’s appeals counsel,Latham & Watkins partner Maureen Mahoney. In December, Mahoney argued thatU.S. district court judge Edward Nottingham wrongly prevented a defensewitness, Daniel Fischel, from testifying in the case. Fischel, a Northwestern University professor, planned to use economicmodeling to show that diversification, not fraud, was the motivating factorbehind Nacchio’s trades. The appeals court ruled that Nottingham hadimproperly barred this testimony. “This is a setback, not a defeat,” Colorado U.S. attorney Troy Eid said in astatement. “The good news is the Circuit Court said our trial team presentedsufficient evidence to convict Mr. Nacchio of insider trading.” Eid addedthat his office is considering its options “in consultation with theDepartment of Justice,” according to The Denver Post. Qwest nearly collapsed in 2002 following reports that the company hadfraudulently booked $3 million in revenues. A prosecution of four midlevelQwest executives in 2003 was widely seen as a failure. None of theexecutives spent any time in prison. The Nacchio case was seen as the last,best effort by prosecutors to hold someone responsible for the accountingfraud. In a fall 2007 story in The American Lawyer’s litigation supplement, Denverlawyers largely credited Stricklin and his team with the win. (See “Lean and Mean”.) There is no word on who would lead a second Nacchio prosecution, or who would represent the defendant in a second trial. New Jersey attorney Herbert Stern of Stern & Kilcullen represented Nacchio in the first trial.

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