Former Qwest CEO Faces Jail Time
Nacchio: Guilty
By Richard Martin, 4-20-07
Former Qwest CEO Joe Nacchio was convicted Thursday on 19 of the 42 counts of insider trading he'd been charged with. Nacchio's sentencing is set for July 27, when he faces a term of up to 10 years in prison and a $1 million fine on each count. He may be forced to forfeit some or all of the $52 million he made on the stock sales.
The jury's verdict seemed to turn on the April 24, 2001 earnings conference call, when Nacchio said nothing to analysts and investors about Qwest's deteriorating financial prospects even though he'd been receiving warnings from subordinates for months. All of the sales on which Nacchio was convicted took place after that call.
Nacchio's defense rested largely on the novel assertion that he had classified information on big Dept. of Defense contracts that Qwest was in line to receive, which he claimed would have turned the company's finances around. Those contracts never materialized.
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