Qwest’s Nacchio Convicted; Last Big Corporate Fraud Case


Joe Nacchio, the aggressive chief executive who oversaw Qwest’s spectacular growth and its near collapse into bankruptcy, was found guilty on 19 of 42 counts of illegal insider trading yesterday. The Denver Post calls the case “a successful end to the government’s crackdown on the corporate fraud that rocked Wall Street earlier this decade, from Enron to WorldCom.” Nacchio was the last to stand trial among a group of high-level executives who enriched themselves while their companies crumbled.

A key date for jurors was April 24, 2001, when Nacchio spoke in an earnings conference call with analysts and investors. By then, Nacchio had received months of warnings about Qwest’s deteriorating financial condition and its growing reliance on questionable one-time sales of capacity on its fiber-optic network. Yet, he gave no indication about the problems on the call. The jury of eight men and four women, several of whom welled with emotion as the verdicts were announced, took 6 days to deliberate after a nearly four-week trial. Nacchio, 57, faces a maximum 10 years in prison and a $1 million fine on each of the 19 guilty counts.

Link: http://www.denverpost.com/ci_5708804

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