The former Qwest Communications chief is on trial in Denver for 42 counts of insider trading. What are his chances?Smiling and locking arms with his wife and one of his sons, Joseph Nacchio strode into the federal courthouse in Denver last week looking more like a man on his way to family wedding than a former chief executive charged with 42 counts of insider trading. Of course, Nacchio, the onetime head of telecom giant Qwest Communications International (Q), has never been accused of lacking confidence.
The 57-year-old New Jersey resident's fate is still to be determined. On Mar. 27, jurors heard a second day of testimony from the government's star witness, Qwest's former chief financial officer Robin Szeliga, who testified that Nacchio had refused to temper the company's earnings guidance despite his having heard from other executives that Qwest would not meet internal targets. Federal prosecutors claim that Nacchio sold more than $100 million worth of stock during the first five months of 2001, all the while knowing that Qwest's sales prospects were weakening. "This is a case about cheating," Assistant U.S. Attorney James Hearty said in his opening statement on Mar. 20.
Nacchio has steadfastly maintained his innocence. His attorney, Herbert Stern, told jurors during his opening statement on Mar. 20 that Nacchio only sold shares from grants that had vested and on which he would owe income taxes. Stern said Nacchio sold the shares as part of a regularly scheduled divestiture program and that the executive was considering leaving the company to care for a son who had tried to commit suicide.
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