Qwest's Nacchio Sentenced To Six Years, Fined $19 Million
The former CEO was convicted of illegally acquiring stock profits while at the helm of the telecommunications company.
Former Qwest Communications chief executive Joe Nacchio was ordered to serve six years in jail for his insider trading conviction.
Federal Judge Edward Nottingham issued the ruling Friday, adding that Nacchio pay $19 million in fines and forfeit the $52 million in stock profits that he was convicted of illegally acquiring while at the helm of the telecommunications company.
Nacchio was convicted by a jury earlier this year.
According to media reports, Nacchio declined to take the stand and let his attorney, Herbert Stern, do the talking for him. Stern argued that Nacchio rode Qwest down as it collapsed at the end of the technology bubble.
The Denver courtroom was packed with former Qwest and U.S. West employees and stockholders who suffered when the company's stock plunged and when Qwest began layoffs.
As Qwest's CEO from 1997 to June 2002, Nacchio was the company's top executive when the stock exploded upward before it crashed. Nacchio was convicted on 19 counts of illegal insider stock trading on sales of Qwest stock in April and May 2001.
When the judge promised a prison term for Nacchio, defense attorney Stern made an emotional appeal against incarceration.
"To impose the highest possible punishment would be to pile on in an inappropriate way," said Stern, noting that Nacchio's fragile son had tried to commit suicide and indicating that the elder Nacchio was dedicated to helping the youngster.
But Judge Nottingham wasn't swayed. He gave Nacchio a few days to settle the verdict finances and to prepare for a prison term.
Nacchio's legal team is planning to appeal and may ask the U.S. Bureau of Prisons to allow the former Qwest CEO to serve at a minimum security prison in Pennsylvania.
Prosecutors had asked that Nacchio serve seven years and three months in prison in addition to paying financial penalties for the stock trades judged to have been based on insider information.
Richard Notebaert took over as chairman and CEO at Qwest in 2002 and quickly stabilized the floundering telecommunications firm.
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