Former Qwest CEO found guilty on 19 counts of insider trading
denver -- Joe Nacchio, a former AT&T; executive tapped to transform Qwest Communications International Inc. into a major telecommunications competitor, was convicted Thursday of 19 of 42 insider trading charges after onetime top executives described his relentless drive to meet revenue projections without revealing financial risks.
A U.S. District Court jury deliberated six days before concluding on 19 counts that the former Qwest chief executive illegally sold stock in April and May 2001, when he knew that the company faced financial challenges and that it relied heavily on one-time sales to meet revenue targets.
The jury acquitted him on the other 23 counts stemming from sales in January and February.
Judge Edward Nottingham set a July 27 sentencing date for Nacchio, who is free on $2-million bail. Each count carries a potential penalty of 10 years in prison and a $1-million fine.
“ ‘Convicted felon Joe Nacchio’ has a very nice ring to it,” boasted Troy Eid, the U.S. attorney for Colorado.
Defense attorney Herbert Stern said, “We certainly will appeal.”
Nacchio, who still faces a civil fraud lawsuit, declined to comment. A smile sometimes crossed his face as he left the federal courthouse arm in arm with his wife. They walked away on a busy downtown street.
The 12 jurors left the courthouse without commenting.
Nacchio, 57, was accused of selling $101 million worth of stock in the first five months of 2001 based on inside information that Qwest faced financial risks.
With the decision, the eight men and four women on the jury turned away Nacchio’s contention that he believed in the company’s future despite concerns voiced by business managers.
The criminal case stemmed from a years-long government investigation into an accounting scandal at Qwest, a Denver-based telephone service provider in 14 mostly Western states.
Federal regulators have said Qwest falsely reported fiber-optic capacity sales as recurring instead of as one-time revenue from April 1999 to March 2002.
