Former Qwest CEO Joseph Nacchio was indicted by a federal grand jury on Tuesday.
Nacchio is charged with profiting by insider trading in the sale of more than $100 million of Qwest stock between January and May 2001, after he had been warned that the company wouldn’t meet its revenue targets.
Prosecutors want Nacchio to return approximately $101 million in profits from the transactions.
Douglas McNabb, principal of McNabb Associates, a law firm specializing in the defense of individuals charged with white-collar crimes, said that each count carries a maximum penalty of 10 years in Federal prison.
McNabb noted that several other former Qwest executives had been indicted and agreed to cooperate with federal prosecutors.
“They’ve reached a plea agreement with the government that says they’ll plead guilty to certain offenses and assist the government with regard to the prosecution of others. They may be called to testify at trial against this gentleman,” he said.
Nacchio was fired in 2002 and replaced by former Ameritech chief Richard Notebaert as his replacement. The company was then facing an investigation by the Securities and Exchange Commission (SEC) over accounting procedures.
In March, Qwest attempted to acquire MCI, but was spurned in favor of Verizon .
According to McNabb, the overall conviction rate in cases brought by the DoJ is about 91 percent, and the government wins roughly 86 percent of its cases on appeal.
He said the trial could take six to eight weeks; if Nacchio loses, he can appeal to the 10th Circuit Court, also located in Denver. After a loss there, Nacchio could petition the U.S. Supreme Court to hear his appeal, but the Supremes can decline to do so.
“When you’ve been indicted by the U.S. government,” McNabb said, “that hill you have to [climb] over gets even taller.”
