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Member Number: 9750
Joseph P. Nacchio (born June 22, 1949), in Brooklyn, New York, was chairman of the board and chief executive officer of Qwest Communications International from 1997 to 2002. He was convicted of 19 counts of insider trading in Qwest stock on April 19, 2007.
Biography
He is the son of a New York City longshoreman and bartender and graduated in 1970 from New York University with a B.S. in Electrical Engineering. Later he earned an MBA from New York University and an Master's degree in Management (SM) as a Sloan Fellow from the MIT Sloan School of Management in 1986.
Qwest
Nacchio joined Qwest in 1997 from AT&T.
While Chairman, Nacchio was serving on two federal advisory panels — the Network Reliability and Interoperability Council and the National Security Telecommunications Advisory Committee. He was Chairman of the latter and was given a TOP SECRET security clearance in the late 1990s.
Qwest stock began a sharp decline in May 2001, falling below $20 by July 2002. Nacchio resigned from Qwest in June 2002 amidst insider trading rumors and was replaced by former Ameritech CEO Richard Notebaert.
Insider trading, fraud
Nacchio was convicted on 19 of 42 counts of insider trading case on April 19th, 2007. He was released on on $2 million bond and sentencing is scheduled for July 27. The sentence may include up to 10 years in jail and $1 million in fines for each of the 19 counts, as well as asset forfeiture.
On March 15, 2005, Nacchio and six other former Qwest executives were sued by the U.S. Securities and Exchange Commission. They were accused of a "massive" $3 billion financial fraud between 1999 and 2002 and of benefiting from an inflated stock price.
In its case, the government stated that Nacchio continued to tell Wall Street that Qwest would be able to achieve aggressive revenue targets long after he knew that they could not be achieved. This helped it buy up regional phone rival US West, the government alleges. On his part, Nacchio maintains that he believed Qwest would soon be receiving several large government contracts. On November 21, 2005, The Wall Street Journal reported that Nacchio "believed Qwest was doing well because it was getting lucrative secret national-security-related work from the federal government." Nacchio claimed that he was not in a rightful state of mind when he sold his shares because of problems with his son, and the imminent announcement of a number of government contracts.
Nacchio was indicted on December 20, 2005 on insider trading charges in Denver, Colorado. He was forced to surrender his passport for fear that he would flee the country. The indictment against Nacchio charged him with 42 counts of insider trading. Each count carries a potential 10-year jail term and corresponds to a sale of Qwest shares, including a flurry in April-May 2001, when Nacchio sold almost $39 million in stock. At the time, Qwest was trading between $41.12 and $38.31.
Links- Kopel, Dave. "Kopel: Internet Humming with Nacchio Trial Coverage: Blogs, Web Sites Rife with Insight, Info". Rocky Mountain News March 24, 2007, Opinion. Accessed March 24, 2007
- Joe Nacchio On Trial (The Denver Post trial site, with hyperlinks to news articles, multi-media, and trial blog).
- Nacchio On Trial (The Rocky Mountain News trial site, with hyperlinks to news articles and trial blog).
- Times Topics: Joseph P. Nacchio (Index of articles about Joseph P. Nacchio published in The New York Times).
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Former Qwest CEO seeks dismissal of SEC complaint BusinessWeek - Former Qwest Chief Executive Joseph Nacchio is asking a judge to dismiss Securities and Exchange Commission claims against him, or at least allow him to use ... |
SOS -- 'Save Our Stocks' Wall Street Journal - A federal appeals court overturns the insider-trading conviction of Joseph Nacchio, ex-chief executive of Qwest Communications International, ... |
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