Joseph P. Nacchio (born June 22, 1949 in

Brooklyn, New York Brooklyn is a Boroughs of New York City, borough of New York City located at the westernmost end of Long Island in the New York (state), State of New York. Formerly an independent city, the borough is coextensive with Kings County, one of twelv ...

) is an American executive who was

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

and

chief executive officer A chief executive officer (CEO), also known as a chief executive or managing director, is the top-ranking corporate officer charged with the management of an organization, usually a company or a nonprofit organization. CEOs find roles in variou ...

of Qwest Communications International 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 government, local and federal governments or intell ...

demanded by the NSA which began prior to the

11 September 2001 attacks The September 11 attacks, also known as 9/11, were four coordinated Islamist terrorist suicide attacks by al-Qaeda against the United States in 2001. Nineteen terrorists hijacked four commercial airliners, crashing the first two into ...

. 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 informati ...

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 an 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, collection, and proces ...

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

in limine In U.S. law, a motion ''in limine'' (, "at the start"; literally, "on the threshold") is a motion, discussed outside the presence of the jury, to request that certain testimony be excluded. A motion ''in limine'' can also be used to get a rulin ...

'' 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 Legislat ...

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 language, Pennsylvania Dutch: Schulkill Kaundi) is a County (United States), county in the Commonwealth (U.S. state), Commonwealth of Pennsylvania. As of the 2020 United States census, 2020 census, the ...

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 (NYC), is the most populous city in the United States, located at the southern tip of New York State on one of the world's largest natural harbors. The city comprises five boroughs, each coextensive w ...

longshoreman A dockworker (also called a longshoreman, stevedore, docker, wharfman, lumper or wharfie) is a waterfront manual laborer who loads and unloads ships. As a result of the intermodal shipping container revolution, the required number of dockworke ...

and bartender and graduated in 1970 from

New York University New York University (NYU) is a private university, private research university in New York City, New York, United States. Chartered in 1831 by the New York State Legislature, NYU was founded in 1832 by Albert Gallatin as a Nondenominational ...

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 that 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) is a professional degree focused on business administration. The core courses in an MBA program cover various areas of business administration; elective courses may allow further study in a particular a ...

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

Sloan Fellow The Sloan Fellows program is a middle and senior-career master's degree program in general management and leadership offered at MIT, Stanford University, and London Business School (LBS). Initially supported by a grant from Alfred P. Sloan, fo ...

from the

MIT Sloan School of Management The MIT Sloan School of Management (branded as MIT 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 progra ...

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, an abbreviation for its former name, the American Telephone and Telegraph Company, was an American telecommunications company that provided voice, video, data, and Internet telecommunications and professional services to busi ...

. 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. 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 Fed. Supp. 131), a cas ...

. 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 Law of the United States, United States federal law that establishes procedures for the surveillance and collection of foreign intelligence on domestic soil.NSA The National Security Agency (NSA) is an 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, collection, and proces ...

. According to a ''

The Washington Post ''The Washington Post'', locally known as ''The'' ''Post'' and, informally, ''WaPo'' or ''WP'', is an American daily newspaper published in Washington, D.C., the national capital. It is the most widely circulated newspaper in the Washington m ...

'' 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), was an American telecommunications company that arose out of the 1984 AT&T divestiture. Ameritech was one of the ...

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 of ...

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 United States 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. Its primary purpose is to enforce laws against market m ...

. 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 a street in the Financial District, Manhattan, Financial District of Lower Manhattan in New York City. It runs eight city blocks between Broadway (Manhattan), Broadway in the west and South Street (Manhattan), South Str ...

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'' (''WSJ''), also referred to simply as the ''Journal,'' is an American newspaper based in New York City. The newspaper provides extensive coverage of news, especially business and finance. It operates on a subscriptio ...

'' 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 List of municipalities in Colorado#Consolidated city and county, consolidated city and county, the List of capitals in the United States, capital and List of municipalities in Colorado, most populous city of the U.S. state of ...

. 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 * Fidelity bond, a type of insurance policy for employers * Chemical bond, t ...

. On July 27, 2007, Nacchio was sentenced to six years in federal prison. Federal Judge

Edward Nottingham Edward Willis Nottingham Jr. (born January 9, 1948) is a former United States district judge of the United States District Court for the District of Colorado, having served in that office from November 24, 1989, until his resignation on October 2 ...

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 Federal tribunals in the United States, U.S. federal court cases, and over Stat ...

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 a prerogative writ in England, issued by a superior court to direct that the recor ...

.Court Orders
US Supreme Court 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, from April 23, 1859, until February 27, 2009. It was owned by the E. W. Scripps Company from 1926 until its closing. the Monday–Friday ...

'' 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 the Denver metropolitan area. it has an average print circulation of 57,265. In 2016, its website received roughly six million monthly unique visitors generating more than 13 mil ...

'' 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, from April 23, 1859, until February 27, 2009. It was owned by the E. W. Scripps Company from 1926 until its closing. the Monday–Friday ...

'' 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'' (''NYT'') is an American daily newspaper based in New York City. ''The New York Times'' covers domestic, national, and international news, and publishes opinion pieces, investigative reports, and reviews. As one of ...

''). {{DEFAULTSORT:Nacchio, Joseph Living people Stuyvesant High School alumni Polytechnic Institute of New York University alumni MIT Sloan School of Management alumni 1949 births New York University Stern School of Business alumni American chief executives AT&T people People convicted of insider trading