Former Qwest Communications chief executive Joseph Nacchio has been sentenced to six years in prison for his insider-trading conviction, according to the Associated Press. Nacchio was also ordered to forfeit $52 million in assets he gained from the illegal stock sales in the next 15 days.
In addition, U.S. District Judge Edward Nottingham imposed a maximum $19 million fine and ordered the former CEO to serve two years of probation after serving his sentence, the AP noted. Nacchio had faced a maximum of seven years, three months in prison, according to the report.
On April 20, Nacchio was found guilty of engaging in illegal insider trading in what was probably the last high-profile corporate case since the Enron scandal. He was convicted on 19 counts of insider trading for selling $52 million worth of Qwest shares in April and May 2001 after receiving private warnings that the company would miss revenue targets. He was found not guilty of 23 counts related to earlier trades totaling $49 million.
In December 2005, federal prosecutors accused Nacchio of making $100.8 million by trading in Qwest shares between January 2 and May 29, 2001. The indictment accused him of “a manipulative and deceptive” scheme to commit fraud, AP reported at the time. The prosecutors also asserted Nacchio was “specifically and repeatedly warned” about the financial risks facing his company just five months before the stock trades. The indictment also charged that the executive was well aware of Qwest’s “extremely aggressive” financial targets, and that he knew there wouldn’t be enough revenue from other sources to “close the gap” between Qwest’s publicly stated goals and its actual performance.