Infrastructure
News
7/27/2007
02:09 PM
Connect Directly
RSS
E-Mail
50%
50%

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.

Comment  | 
Print  | 
More Insights
2014 Next-Gen WAN Survey
2014 Next-Gen WAN Survey
While 68% say demand for WAN bandwidth will increase, just 15% are in the process of bringing new services or more capacity online now. For 26%, cost is the problem. Enter vendors from Aryaka to Cisco to Pertino, all looking to use cloud to transform how IT delivers wide-area connectivity.
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Tech Digest - July10, 2014
When selecting servers to support analytics, consider data center capacity, storage, and computational intensity.
Flash Poll
Video
Slideshows
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
Join InformationWeek’s Lorna Garey and Mike Healey, president of Yeoman Technology Group, an engineering and research firm focused on maximizing technology investments, to discuss the right way to go digital.
Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.