Joseph P. Nacchio (born June 22, 1949 in

Brooklyn, New York Brooklyn () is a borough of New York City, coextensive with Kings County, in the U.S. state of New York. Kings County is the most populous county in the State of New York, and the second-most densely populated county in the United States, be ...

) is an American executive who was

chairman of the board The chairperson, also chairman, chairwoman or chair, is the presiding officer of an organized group such as a board, committee, or deliberative assembly. The person holding the office, who is typically elected or appointed by members of the grou ...

and

chief executive officer A chief executive officer (CEO), also known as a central executive officer (CEO), chief administrator officer (CAO) or just chief executive (CE), is one of a number of corporate executives charged with the management of an organization especially ...

Qwest Communications International Qwest Communications International, Inc. was a United States telecommunications carrier. Qwest provided local service in 14 western and midwestern U.S. states: Arizona, Colorado, Idaho, Iowa, Minnesota, Montana, Nebraska, New Mexico, North Dako ...

from 1997 to 2002. Nacchio was convicted of insider trading during his time heading Qwest. He claimed in court, with documentation, that his was the only company to demand legal authority for surreptitious

mass surveillance Mass surveillance is the intricate surveillance of an entire or a substantial fraction of a population in order to monitor that group of citizens. The surveillance is often carried out by local and federal governments or governmental organizati ...

demanded by the NSA which began prior to the

11 September 2001 attacks The September 11 attacks, commonly known as 9/11, were four coordinated suicide terrorist attacks carried out by al-Qaeda against the United States on Tuesday, September 11, 2001. That morning, nineteen terrorists hijacked four commerc ...

. He was convicted of 19 counts of

insider trading Insider trading is the trading of a public company's stock or other securities (such as bonds or stock options) based on material, nonpublic information about the company. In various countries, some kinds of trading based on insider information ...

in Qwest stock on April 19, 2007 – charges his defense team claimed were U.S. government retaliation for his refusal to give customer data to the

National Security Agency The National Security Agency (NSA) is a national-level intelligence agency of the United States Department of Defense, under the authority of the Director of National Intelligence (DNI). The NSA is responsible for global monitoring, collecti ...

in February, 2001. This defense was not admissible in court because the U.S. Department of Justice filed an ''

in limine IN, In or in may refer to: Places * India (country code IN) * Indiana, United States (postal code IN) * Ingolstadt, Germany (license plate code IN) * In, Russia, a town in the Jewish Autonomous Oblast Businesses and organizations * Independ ...

'' motion, which is often used in national security cases, to exclude information which may reveal state secrets. Information from the

Classified Information Procedures Act The Classified Information Procedures Act or CIPA ( through ) is codified as the third appendix to Title 18 of the U.S. Code, the title concerning crimes and criminal procedures. The U.S. Code citation i18 U.S.C. App. III. Sections 1-16 Legislativ ...

hearings in Nacchio's case was likewise ruled inadmissible. On July 27, 2007, he was sentenced to six years in federal prison, and after appeals failed he reported to

Federal Correctional Institution, Schuylkill The Federal Correctional Institution, Schuylkill (FCI Schuylkill) is a medium-security United States federal prison for male inmates in Pennsylvania. It is operated by the Federal Bureau of Prisons, a division of the United States Department of Ju ...

Schuylkill County, Pennsylvania Schuylkill County (, ; Pennsylvania Dutch: Schulkill Kaundi) is a county in the Commonwealth of Pennsylvania. It is located in the heart of Pennsylvania's Coal Region and is part of Northeastern Pennsylvania. As of the 2020 census, the popula ...

on April 14, 2009 to serve his sentence. Nacchio finished serving his sentence on September 20, 2013.

Early life

He is the son of a

New York City New York, often called New York City or NYC, is the List of United States cities by population, most populous city in the United States. With a 2020 population of 8,804,190 distributed over , New York City is also the L ...

longshoreman A stevedore (), also called a longshoreman, a docker or a dockworker, is a waterfront manual laborer who is involved in loading and unloading ships, trucks, trains or airplanes. After the shipping container revolution of the 1960s, the number o ...

and bartender and graduated in 1970 from

New York University New York University (NYU) is a private research university in New York City. Chartered in 1831 by the New York State Legislature, NYU was founded by a group of New Yorkers led by then-Secretary of the Treasury Albert Gallatin. In 1832, the ...

with a B.S. in

Electrical Engineering Electrical engineering is an engineering discipline concerned with the study, design, and application of equipment, devices, and systems which use electricity, electronics, and electromagnetism. It emerged as an identifiable occupation in the l ...

. Later he earned an

MBA A Master of Business Administration (MBA; also Master's in Business Administration) is a postgraduate degree focused on business administration. The core courses in an MBA program cover various areas of business administration such as accounti ...

from New York University and a Master's degree in Management (SM) as a

Sloan Fellow The Sloan Fellows program is the world's first mid-career and senior career master's degree in general management and leadership. It was initially supported by a grant from Alfred P. Sloan, the late CEO of General Motors, to his alma mater, MI ...

from the

MIT Sloan School of Management The MIT Sloan School of Management (MIT Sloan or Sloan) is the business school of the Massachusetts Institute of Technology, a private university in Cambridge, Massachusetts. MIT Sloan offers bachelor's, master's, and doctoral degree programs, ...

in 1986.

Career

Qwest

Nacchio joined

Qwest Qwest Communications International, Inc. was a United States telecommunications carrier. Qwest provided local service in 14 western and midwestern U.S. states: Arizona, Colorado, Idaho, Iowa, Minnesota, Montana, Nebraska, New Mexico, North Dako ...

in 1997 from

AT&T Corporation AT&T Corporation, originally the American Telephone and Telegraph Company, is the subsidiary of AT&T Inc. that provides voice, video, data, and Internet telecommunications and professional services to businesses, consumers, and government agen ...

. While Chairman, Nacchio was serving on two federal advisory panels—the Network Reliability and Interoperability Council and the National Security Telecommunications Advisory Committee. He was Chairman of the latter and was given a top secret security clearance in the late 1990s. In 2000, during Nacchio's tenure as Qwest CEO, the company acquired its regional rival

US West US West, Inc. (stylized as US WEST) was one of seven Regional Bell Operating Companies (RBOCs, also referred to as "Baby Bells"), created in 1983 under the Modification of Final Judgement (''United States v. Western Electric Co., Inc.'' 552 ...

. In 2002, Qwest admitted to false accounting during the time of the merger. Joseph P. Nacchio was the only head of a communications company to demand a court order, or approval under the

Foreign Intelligence Surveillance Act The Foreign Intelligence Surveillance Act of 1978 ("FISA" , ) is a United States federal law that establishes procedures for the physical and electronic surveillance and the collection of "foreign intelligence information" between "foreign po ...

, in order to turn over communications records to the

NSA The National Security Agency (NSA) is a national-level intelligence agency of the United States Department of Defense, under the authority of the Director of National Intelligence (DNI). The NSA is responsible for global monitoring, collecti ...

. According to a ''

The Washington Post ''The Washington Post'' (also known as the ''Post'' and, informally, ''WaPo'') is an American daily newspaper published in Washington, D.C. It is the most widely circulated newspaper within the Washington metropolitan area and has a large nati ...

'' report, Nacchio claimed that the National Security Agency had asked Qwest in February 2001 to participate in a surveillance program; Nacchio said that after he declined, the NSA punished Qwest by dropping a contract worth hundreds of millions of dollars. Nacchio had been selling his Qwest stock as early as January. Qwest stock began a sharp decline in May 2001, falling from $38 to below $2 by August 2002. Nacchio resigned from Qwest in June 2002 and was replaced by former

Ameritech AT&T Teleholdings, Inc., formerly known as Ameritech Corporation (and before that American Information Technologies Corporation), is an American telecommunications company that arose out of the 1984 AT&T divestiture. Ameritech was one of the se ...

CEO

Richard Notebaert Richard C. Notebaert (born 1947 in Montreal, Canada) is the former Chairman and CEO of Qwest, Tellabs and Ameritech. He was credited for saving Qwest from bankruptcy, and making Ameritech the most successful "Baby Bell". Notebaert is a member o ...

Insider trading, fraud

On March 15, 2005, Nacchio and six other former Qwest executives were sued by the

U.S. Securities and Exchange Commission The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...

. They were accused of a $3 billion financial fraud between 1999 and 2002 and of benefiting from an inflated stock price. In its case, the government stated that Nacchio continued to tell

Wall Street Wall Street is an eight-block-long street in the Financial District of Lower Manhattan in New York City. It runs between Broadway in the west to South Street and the East River in the east. The term "Wall Street" has become a metonym for t ...

that Qwest would be able to achieve aggressive revenue targets long after he knew that they could not be achieved. This helped it buy up regional phone rival

, the government alleged. For his part, Nacchio maintained that he believed Qwest would soon be receiving several large government contracts. On November 21, 2005, ''

The Wall Street Journal ''The Wall Street Journal'' is an American business-focused, international daily newspaper based in New York City, with international editions also available in Chinese and Japanese. The ''Journal'', along with its Asian editions, is published ...

'' reported that Nacchio "believed Qwest was doing well because it was getting lucrative secret national-security-related work from the federal government." Nacchio claimed that he was not in a rightful state of mind when he sold his shares because of problems with his son, and the imminent announcement of a number of government contracts. Nacchio was indicted on December 20, 2005 on insider trading charges in

Denver, Colorado Denver () is a consolidated city and county, the capital, and most populous city of the U.S. state of Colorado. Its population was 715,522 at the 2020 census, a 19.22% increase since 2010. It is the 19th-most populous city in the Unit ...

. He was forced to surrender his passport for fear that he would flee the country. The indictment against Nacchio charged him with 42 counts of insider trading. Each count carries a potential 10-year jail term and corresponds to a sale of Qwest shares, including a flurry in April–May 2001, when Nacchio sold almost $39 million in stock. At the time, Qwest was trading between $41.12 and $38.31. Nacchio was convicted on 19 of 42 counts of insider trading case on April 19, 2007. He was released on a $2 million

bond Bond or bonds may refer to: Common meanings * Bond (finance), a type of debt security * Bail bond, a commercial third-party guarantor of surety bonds in the United States * Chemical bond, the attraction of atoms, ions or molecules to form chemica ...

. On July 27, 2007, Nacchio was sentenced to six years in federal prison. Federal Judge Edward Nottingham also ordered Nacchio to pay a $19 million fine and forfeit $52 million he gained in illegal stock sales. On March 17, 2008, the U.S. Court of Appeals for the Tenth Circuit overturned his conviction on the basis of defense expert witness testimony that was improperly excluded, and ordered a new trial before a different trial judge. Herbert J. Stern led Nacchio’s defense team during the initial trial, while Maureen Mahoney was lead defense attorney during the appeal. On February 25, 2009, the full Tenth Circuit reversed the three-judge panel and reinstated the conviction and sentence. Nacchio surrendered April 14, 2009 to a federal prison camp in Schuylkill, Pennsylvania to begin serving a six-year sentence for the insider trading conviction. The United States Supreme Court denied bail pending appeal the same day. His federal register number is 33973-013. On October 5, 2009, the

US Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point of ...

denied

certiorari In law, ''certiorari'' is a court process to seek judicial review of a decision of a lower court or government agency. ''Certiorari'' comes from the name of an English prerogative writ, issued by a superior court to direct that the record of ...

.https://www.supremecourt.gov/orders/courtorders/100509zor.pdf Nacchio finished serving his sentence on September 20, 2013.

References

External links

* Kopel, Dave.
"Kopel: Internet Humming with Nacchio Trial Coverage:
Blogs, Web Sites Rife with Insight, Info". ''

Rocky Mountain News The ''Rocky Mountain News'' (nicknamed the ''Rocky'') was a daily newspaper published in Denver, Colorado, United States, from April 23, 1859, until February 27, 2009. It was owned by the E. W. Scripps Company from 1926 until its closing. As ...

'' March 24, 2007, Opinion. Accessed March 24, 2007 *
Joe Nacchio On Trial
' (''

The Denver Post ''The Denver Post'' is a daily newspaper and website published in Denver, Colorado. As of June 2022, it has an average print circulation of 57,265. In 2016, its website received roughly six million monthly unique visitors generating more than 13 ...

'' trial site, with hyperlinks to news articles, multi-media, and trial blog). *
Nacchio On Trial
' (''

The Rocky Mountain News The ''Rocky Mountain News'' (nicknamed the ''Rocky'') was a daily newspaper published in Denver, Colorado, United States, from April 23, 1859, until February 27, 2009. It was owned by the E. W. Scripps Company from 1926 until its closing. As ...

'' trial site, with hyperlinks to news articles and trial blog).
Times Topics: Joseph P. Nacchio
(Index of articles about Joseph P. Nacchio published in ''

The New York Times ''The New York Times'' (''the Times'', ''NYT'', or the Gray Lady) is a daily newspaper based in New York City with a worldwide readership reported in 2020 to comprise a declining 840,000 paid print subscribers, and a growing 6 million paid ...