Joseph Nacchio
Encyclopedia
Joseph P. Nacchio 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. On July 27, 2007, he was sentenced to six years in federal prison. His federal register number is 33973-013.
Federal Judge Edward Nottingham
also ordered Nacchio to pay a $19 million fine and forfeit $52 million he gained in illegal stock sales. As of October 15, 2007 he was free on bail
, appeal
ing his conviction on the basis that the U.S. government retaliated against Qwest for his refusal to give customer data to the National Security Agency
. On March 17, 2008, the U.S. Court of Appeals for the Tenth Circuit overturned his conviction on the basis of defense expert witness testimony that was improperly excluded, and ordered a new trial before a different trial judge. On February 25, 2009, Nacchio lost his appeal in a 5-4 ruling by the 10th U.S. Court of Appeals. He was ordered to immediately begin serving his six-year prison sentence. His defense team will now attempt to petition the United States Supreme Court. Nacchio reported to the Federal Prison in Schuylkill County, Pennsylvania
on April 14, 2009 to serve his sentence.
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 a Master's degree in Management (SM) as a Sloan Fellow
from the MIT Sloan School of Management
in 1986.
.
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.
During Nacchio's tenure as Qwest CEO, the company acquired US West
.
Qwest stock began a sharp decline in May 2001, falling from $38 to below $2 by August 2002. Nacchio resigned from Qwest in June 2002 amid insider trading rumors and was replaced by former Ameritech
CEO Richard Notebaert
.
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 For his part, Nacchio maintained 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.
Nacchio was convicted on 19 of 42 counts of insider trading case on April 19, 2007. He was released on a $2 million bond. On July 27, 2007, Nacchio was sentenced to six years in federal prison. Federal Judge Edward Nottingham also ordered Nacchio to pay a $19 million fine and forfeit $52 million he gained in illegal stock sales. On March 17, 2008, the U.S. Court of Appeals for the Tenth Circuit overturned his conviction on the basis of defense expert witness testimony that was improperly excluded, and ordered a new trial before a different trial judge. Nacchio's lead defense attorney is Maureen Mahoney
. On February 25, 2009, the full Tenth Circuit reversed the three-judge panel and reinstated the conviction and sentence.
Nacchio surrendered April 14, 2009 to a federal prison camp in Schuylkill, Pennsylvania to begin serving a six-year sentence for the insider trading conviction. The United States Supreme Court denied bail pending appeal the same day.
On October 5, 2009, the US Supreme Court denied certiorari, letting the conviction stand.
Nacchio was granted a new trial due to a witness being prevented from testifying on this issue of illegal government spying.
Chairman of the Board
The Chairman of the Board is a seat of office in an organization, especially of corporations.Chairman of the Board may also refer to:*Chairman of the Board , a 1998 film*Chairmen of the Board , a 1970s American soul music group...
and chief executive officer
Chief executive officer
A chief executive officer , managing director , Executive Director for non-profit organizations, or chief executive is the highest-ranking corporate officer or administrator in charge of total management of an organization...
of Qwest Communications International
Qwest
Qwest Communications International, Inc. was a large United States telecommunications carrier. Qwest provided local service in 14 western U.S. states: Arizona, Colorado, Idaho, Iowa, Minnesota, Montana, Nebraska, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington, and Wyoming.On April...
from 1997 to 2002. He was convicted of 19 counts of insider trading
Insider trading
Insider trading is the trading of a corporation's stock or other securities by individuals with potential access to non-public information about the company...
in Qwest stock on April 19, 2007. On July 27, 2007, he was sentenced to six years in federal prison. His federal register number is 33973-013.
Federal Judge Edward Nottingham
Edward Nottingham
Edward Willis Nottingham, Jr. is a former United States federal judge in the United States District Court for the District of Colorado having served in that office from November 24, 1989 until his resignation on October 21, 2008....
also ordered Nacchio to pay a $19 million fine and forfeit $52 million he gained in illegal stock sales. As of October 15, 2007 he was free on bail
Bail
Traditionally, bail is some form of property deposited or pledged to a court to persuade it to release a suspect from jail, on the understanding that the suspect will return for trial or forfeit the bail...
, appeal
Appeal
An appeal is a petition for review of a case that has been decided by a court of law. The petition is made to a higher court for the purpose of overturning the lower court's decision....
ing his conviction on the basis that the U.S. government retaliated against Qwest for his refusal to give customer data to the National Security Agency
National Security Agency
The National Security Agency/Central Security Service is a cryptologic intelligence agency of the United States Department of Defense responsible for the collection and analysis of foreign communications and foreign signals intelligence, as well as protecting U.S...
. On March 17, 2008, the U.S. Court of Appeals for the Tenth Circuit overturned his conviction on the basis of defense expert witness testimony that was improperly excluded, and ordered a new trial before a different trial judge. On February 25, 2009, Nacchio lost his appeal in a 5-4 ruling by the 10th U.S. Court of Appeals. He was ordered to immediately begin serving his six-year prison sentence. His defense team will now attempt to petition the United States Supreme Court. Nacchio reported to the Federal Prison in Schuylkill County, Pennsylvania
Schuylkill County, Pennsylvania
-Notable people:*Boxing heavyweight great Muhammad Ali had his training camp in Deer Lake.*Charles Justin Bailey, commanding general of the 81st Division in World War I, was born in Tamaqua on June 21, 1859....
on April 14, 2009 to serve his sentence.
Early life
He is the son of a New York CityNew York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
longshoreman and bartender
and graduated in 1970 from New York University
New York University
New York University is a private, nonsectarian research university based in New York City. NYU's main campus is situated in the Greenwich Village section of Manhattan...
with a B.S. in Electrical Engineering
Electrical engineering
Electrical engineering is a field of engineering that generally deals with the study and application of electricity, electronics and electromagnetism. The field first became an identifiable occupation in the late nineteenth century after commercialization of the electric telegraph and electrical...
. Later he earned an MBA from New York University and a Master's degree in Management (SM) as a Sloan Fellow
Sloan Fellows
The Sloan Fellows program is a mid-career master's degree in general management and leadership supported by a grant from the Alfred P. Sloan Foundation. It is targeted at experienced managers who have already demonstrated a significant degree of career success . Alfred P...
from the MIT Sloan School of Management
MIT Sloan School of Management
The MIT Sloan School of Management is the business school of the Massachusetts Institute of Technology, in Cambridge, Massachusetts....
in 1986.
Qwest
Nacchio joined Qwest in 1997 from AT&TAT&T
AT&T Inc. is an American multinational telecommunications corporation headquartered in Whitacre Tower, Dallas, Texas, United States. It is the largest provider of mobile telephony and fixed telephony in the United States, and is also a provider of broadband and subscription television services...
.
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.
During Nacchio's tenure as Qwest CEO, the company acquired US West
US West
U S WEST, Inc. was one of seven Regional Bell Operating Companies , created in 1983 under the Modification of Final Judgement , a case related to the antitrust breakup of AT&T...
.
Qwest stock began a sharp decline in May 2001, falling from $38 to below $2 by August 2002. Nacchio resigned from Qwest in June 2002 amid insider trading rumors and was replaced by former Ameritech
Ameritech
AT&T Teleholdings, Inc., formerly known as Ameritech Corporation , was a U.S. telecommunications company that arose out of the 1984 AT&T divestiture. Ameritech was one of the seven Regional Bell Operating Companies that was created following the breakup of the Bell System...
CEO Richard Notebaert
Richard Notebaert
Richard C. Notebaert is the former Chairman and CEO of Qwest, Tellabs and Ameritech. He was credited for saving Qwest and Tellabs from bankruptcy, and making Ameritech the most successful "Baby Bell"....
.
Insider trading, fraud
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
Wall Street
Wall Street refers to the financial district of New York City, named after and centered on the eight-block-long street running from Broadway to South Street on the East River in Lower Manhattan. Over time, the term has become a metonym for the financial markets of the United States as a whole, or...
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
US West
U S WEST, Inc. was one of seven Regional Bell Operating Companies , created in 1983 under the Modification of Final Judgement , a case related to the antitrust breakup of AT&T...
, the government alleges For his part, Nacchio maintained that he believed Qwest would soon be receiving several large government contracts. On November 21, 2005, The Wall Street Journal
The Wall Street Journal
The Wall Street Journal is an American English-language international daily newspaper. It is published in New York City by Dow Jones & Company, a division of News Corporation, along with the Asian and European editions of the 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
Denver, Colorado
The City and County of Denver is the capital and the most populous city of the U.S. state of Colorado. Denver is a consolidated city-county, located in the South Platte River Valley on the western edge of the High Plains just east of the Front Range of the Rocky Mountains...
. 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.
Nacchio was convicted on 19 of 42 counts of insider trading case on April 19, 2007. He was released on a $2 million bond. On July 27, 2007, Nacchio was sentenced to six years in federal prison. Federal Judge Edward Nottingham also ordered Nacchio to pay a $19 million fine and forfeit $52 million he gained in illegal stock sales. On March 17, 2008, the U.S. Court of Appeals for the Tenth Circuit overturned his conviction on the basis of defense expert witness testimony that was improperly excluded, and ordered a new trial before a different trial judge. Nacchio's lead defense attorney is Maureen Mahoney
Maureen Mahoney
Maureen E. Mahoney is a former deputy solicitor general and "top appellate lawyer" at the law firm of Latham & Watkins in Washington, D.C. who has argued cases before the Supreme Court of the United States. Notably, she argued on behalf of the University of Michigan and its affirmative action...
. On February 25, 2009, the full Tenth Circuit reversed the three-judge panel and reinstated the conviction and sentence.
Nacchio surrendered April 14, 2009 to a federal prison camp in Schuylkill, Pennsylvania to begin serving a six-year sentence for the insider trading conviction. The United States Supreme Court denied bail pending appeal the same day.
On October 5, 2009, the US Supreme Court denied certiorari, letting the conviction stand.
Foreign Intelligence Surveillance Act, and granting of a new trial
Joseph P. Nacchio was the only head of a communications company to demand a court order, or approval under the Foreign Intelligence Surveillance Act, in order to turn over communications records to the U.S. government.Nacchio was granted a new trial due to a witness being prevented from testifying on this issue of illegal government spying.
External links
- Kopel, DaveDave KopelDave Kopel is an American author, attorney, political science researcher and contributing editor to several publications. He is currently Research Director of the Independence Institute in Golden, Colorado, Associate Policy Analyst at the Cato Institute, contributor to the National Review magazine...
. "Kopel: Internet Humming with Nacchio Trial Coverage: Blogs, Web Sites Rife with Insight, Info". Rocky Mountain NewsRocky Mountain NewsThe Rocky Mountain News was a daily newspaper published in Denver, Colorado, United States from April 23, 1859, until February 27, 2009. It was owned by the E. W. Scripps Company from 1926 until its closing. As of March 2006, the Monday-Friday circulation was 255,427...
March 24, 2007, Opinion. Accessed March 24, 2007 - Joe Nacchio On Trial (The Denver PostThe Denver Post-Ownership:The Post is the flagship newspaper of MediaNews Group Inc., founded in 1983 by William Dean Singleton and Richard Scudder. MediaNews is today one of the nation's largest newspaper chains, publisher of 61 daily newspapers and more than 120 non-daily publications in 13 states. MediaNews...
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 TimesThe New York TimesThe New York Times is an American daily newspaper founded and continuously published in New York City since 1851. The New York Times has won 106 Pulitzer Prizes, the most of any news organization...
).