(CN) – The 10th Circuit on Friday ordered the resentencing of former Qwest CEO Joseph P. Nacchio, who was convicted of insider trading in 2007. The court also overturned his order to pay $19 million in fines and $52 million in forfeiture.
The Denver-based court found that U.S. District Judge Edward Nottingham incorrectly based the six-year prison term, fines and forfeiture on the after-tax proceeds from insider stock trades.
Nacchio’s lawyers argued that Nottingham’s sentence penalized Nacchio for the “normal appreciation in Qwest’s share from 1997 to 2001, which had nothing to do with the offense charged.”
The 10th Circuit agreed.
“Mr. Nacchio’s gain should be calculated in a manner that is more narrowly focused on producing a figure that reflects, in at least approximate terms, the proceeds related to his criminally culpable conduct,” Judge Holmes wrote.
The ruling will likely mean a shorter prison term and smaller penalties.