Wednesday, April 18, 2007

Former Qwest Exec Convicted of Insider Trading

Joseph P. Nacchio, 57, former co-chairman and chief executive officer of Qwest Communications International, was convicted on 19 of 42 counts of insider trading in a case dating back to 2001. According to the indictment, Nacchio sold Qwest stock from January to September 2001 when he knew, but did not disclose publicly, that Qwest was unlikely to continue to meet its publicly announced earnings targets as that year progressed. In June 2002, Nacchio was forced to resign as CEO, when the companies financial troubles became apparent.

Nacchio faces up to ten years in prison and a fine of $1,000,000 per count. Sentencing is scheduled for July 2nd.

"As chief executive officer with access to secret company information,
Joseph P. Nacchio was an insider who knew, unlike the investing public,
that Qwest was in dire financial straits. Nacchio abused his position of
trust and illegally used this inside information to sell off more than $100 million worth of Qwest stock -- something no other Qwest shareholder could do," said Assistant Attorney General Alice S. Fisher of the FBI's Criminal Division.

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