Bronco_Beerslug
12-20-2005, 11:02 AM
Good! This guy was selling his stock while telling shareholders everything was all rosy.
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By Robert Boczkiewicz and Keith Coffman
DENVER (Reuters) - Former Qwest Communications International Inc. (NYSE:Q - news) Chief Executive Joseph Nacchio was indicted by a grand jury on 42 counts of insider trading on Tuesday, court documents showed.
The 11-page indictment handed up by a federal grand jury on Tuesday charges Nacchio with selling more than $100 million of Qwest stock between January and May 2001, at a time when he had been warned by other executives that the telephone carrier would not meet its targets for recurring revenue.
"Beginning as early as August 2000, Nacchio was specifically and repeatedly warned about the material, non-public financial risks facing Qwest and about Qwest's ability to achieve its aggressive publicly stated financial targets," the indictment said.
"Nacchio's stock sales accelerated in January 2001 as he became aware of additional material, non-public information," it said.
Each of the insider trading counts corresponds to a sale of a tranche of Qwest stock made on Nacchio's behalf, according to the indictment. The largest sales came at the end of April and beginning of May 2001, when Nacchio sold almost $39 million in stock.
At the time, the stock was trading between $41.12 and $38.31 on the
New York Stock Exchange. The stock began a sharp decline in May 2001, falling below $2 by July 2002.
Prosecutors are demanding that Nacchio forfeit $101 million in what they describe as profit from his insider trading and indicated they would seize other assets if the money could not be located or had been transferred outside U.S. jurisdiction.
Nacchio, who arrived in Denver on Monday, was in the custody of the U.S. Marshals Service and expected to make his initial court appearance Tuesday afternoon.
A Denver-based lawyer representing Nacchio, John Richilano, could not be immediately reached for comment.
Federal prosecutors have been working for more than three years to build a case against Nacchio by gaining the cooperation of executives who once worked under him, including the former chief financial officer for the regional phone carrier.
Denver-based Qwest, the No. 4 U.S. regional phone carrier, and its executives have been the target of legal action since 2002 when the company was forced to restate $2 billion in revenue for the preceding two years.
Nacchio, who joined Qwest in 1997 and was ousted by the board in June 2002, has repeatedly denied any wrongdoing, including in testimony before a Congressional panel.
Six former Qwest executives have been charged in the securities fraud investigation including the company's former chief financial officer Robin Szeliga.
In July, she pleaded guilty to one count of insider trading and agreed to cooperate with authorities in the investigation.
In her plea agreement, Szeliga said that Qwest's senior managers were aware that the company was boosting revenue figures through deals unknown to investors.
U.S. Attorney Bill Leone scheduled a news conference at noon (2 p.m. EST, 1900 GMT) in Denver to discuss the indictment of Nacchio. Leone was scheduled to be joined by representatives of the
FBI and U.S. Postal Service investigators.
http://tinyurl.com/b6363
---------------------------------------------------------
By Robert Boczkiewicz and Keith Coffman
DENVER (Reuters) - Former Qwest Communications International Inc. (NYSE:Q - news) Chief Executive Joseph Nacchio was indicted by a grand jury on 42 counts of insider trading on Tuesday, court documents showed.
The 11-page indictment handed up by a federal grand jury on Tuesday charges Nacchio with selling more than $100 million of Qwest stock between January and May 2001, at a time when he had been warned by other executives that the telephone carrier would not meet its targets for recurring revenue.
"Beginning as early as August 2000, Nacchio was specifically and repeatedly warned about the material, non-public financial risks facing Qwest and about Qwest's ability to achieve its aggressive publicly stated financial targets," the indictment said.
"Nacchio's stock sales accelerated in January 2001 as he became aware of additional material, non-public information," it said.
Each of the insider trading counts corresponds to a sale of a tranche of Qwest stock made on Nacchio's behalf, according to the indictment. The largest sales came at the end of April and beginning of May 2001, when Nacchio sold almost $39 million in stock.
At the time, the stock was trading between $41.12 and $38.31 on the
New York Stock Exchange. The stock began a sharp decline in May 2001, falling below $2 by July 2002.
Prosecutors are demanding that Nacchio forfeit $101 million in what they describe as profit from his insider trading and indicated they would seize other assets if the money could not be located or had been transferred outside U.S. jurisdiction.
Nacchio, who arrived in Denver on Monday, was in the custody of the U.S. Marshals Service and expected to make his initial court appearance Tuesday afternoon.
A Denver-based lawyer representing Nacchio, John Richilano, could not be immediately reached for comment.
Federal prosecutors have been working for more than three years to build a case against Nacchio by gaining the cooperation of executives who once worked under him, including the former chief financial officer for the regional phone carrier.
Denver-based Qwest, the No. 4 U.S. regional phone carrier, and its executives have been the target of legal action since 2002 when the company was forced to restate $2 billion in revenue for the preceding two years.
Nacchio, who joined Qwest in 1997 and was ousted by the board in June 2002, has repeatedly denied any wrongdoing, including in testimony before a Congressional panel.
Six former Qwest executives have been charged in the securities fraud investigation including the company's former chief financial officer Robin Szeliga.
In July, she pleaded guilty to one count of insider trading and agreed to cooperate with authorities in the investigation.
In her plea agreement, Szeliga said that Qwest's senior managers were aware that the company was boosting revenue figures through deals unknown to investors.
U.S. Attorney Bill Leone scheduled a news conference at noon (2 p.m. EST, 1900 GMT) in Denver to discuss the indictment of Nacchio. Leone was scheduled to be joined by representatives of the
FBI and U.S. Postal Service investigators.
http://tinyurl.com/b6363