Former Qwest chieftain Joseph Nacchio is guilty of 19 counts of insider trading.
Nacchio was on trial in Denver federal court for 42 counts of insider trading. The jury found him not guilty on 23 counts. The former chief executive officer sold $100.8 million worth of Qwest stock in 2001 just before the company's shares dropped.
Each guilty count carries a maximum 10-year sentence and a $1 million fine. Nacchio will be sentenced on July 27. The court also could claim Nacchioâ€™s assets in forfeiture, the amount to be determined by a federal judge at a different date. Nacchio was released on bond.
Nacchioâ€™s defense rested in significant part on an argument that Qwest CEO had access to classified information about big national-security-related federal contracts that he thought Qwest would win.
But, according to a Justice Department release, Nacchioâ€™s indictment specifically states that â€œNacchio knew that Qwestâ€™s 2001 financial targets were overly aggressive, that Qwest did not have a good track record in growing recurring revenue, that the companyâ€™s business units were underperforming, and that there would be insufficient non-recurring revenue sources to close the gap between Qwestâ€™s publicly stated financial targets and its actual performance. It further states that Nacchio was specifically warned about this information.â€