Former Qwest Communications chief executive Joseph Nacchio was found guilty last week on 19 of 42 counts of insider trading.
Nacchio will remain free on a $2 million bond, pending an appeal.
The guilty counts revolve around the ex-CEO’s sale of $52 million in Qwest shares from April 26 to May 29, 2001. He had been accused of selling more than $100 million worth of Qwest stock in the first few months of 2001, even while knowing that the company could not meet the ambitious sales and earnings targets he had set. A federal investigation found that Qwest falsely reported sales as recurring revenue between April 1999 and March 2002 to meet those targets; in the process, the company improperly reported $3 billion in revenues.
The government chose to accuse Nacchio only of insider trading, rather than get into the more complicated issues surrounding the company's accounting. Nacchio still faces a civil suit in connection with the insider-trading case.
Nacchio is scheduled to be sentenced on July 27. The convictions carry a maximum penalty of 10 years in prison and $1 million in fines for each of the 19 counts.
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