Ex-Qwest Chief Nacchio Gets 6 Years for Inside Trades
In case you missed it, Joseph Nacchio, former chief executive officer of Qwest Communications International Inc., was sentenced to six years in prison for trading $52 million in company shares based on inside information about falling revenue.
As you may recall, in a post titled SEC vs. Nacchio over two years ago I said the following:
The WSJ reports civil charges are about to be filed against Quest’s Joe Nacchio the former CEO. The charges are expected to be cooking the books otherwise known as fraud. The area of interest is “capacity sales,” that Nacchio has said in the past are legit while the SEC says they were “Sham transactions.” We’ll have to see who wins.
This case is actually a different one and Nacchio still faces a lawsuit from the U.S. Securities and Exchange Commission that accuses him of directing a $3 billion accounting fraud. He also faces investor lawsuits. For details, see this Bloomberg article.
The telecom industry has seen a good share of executives breaking the law and going to jail. Hopefully this news marks the end of this chapter in the industry’s history.