Rocky Mountain insider-trading trial
LISA NAPOLI: The curtain rises in Denver today on kind of a Rocky Mountains version of the Enron case. Former Qwest Communications CEO Joseph Nacchio is charged with insider trading. Nacchio profited mightily before the telecomm giant’s stock collapsed, leaving many workers and retirees devastated. But that doesn’t mean convicting him will be easy. more from Marketplace’s Steve Tripoli.
STEVE TRIPOLI: The trial revolves around the timing of some of Nacchio’s stock sales. Prosecutors allege those sales came after he got internal warnings of trouble.
But other Qwest executives have come away from similar trials with no jail time. Lynn Turner, a former chief accountant for the Securities and Exchange Commission, says the government botched those prosecutions.
LYNN TURNER: I’m not sure that they’re gonna be able to do much better just because they got the top guy.
The financial cost to Qwest has nevertheless been huge. Reporter Jeff Smith has been following the story for the Rocky Mountain News.
JEFF SMITH: We tallied it up and Qwest has spent more than $1 billion defending itself and its former executives and directors.
Nacchio’s lawyers are expected to claim that he had sensitive information about future national security contracts, and therefore thought the company would prosper. So he wasn’t dumping stock ahead of a fall, they may argue, just diversifying his holdings.
I’m Steve Tripoli for Marketplace.
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