I am looking forward to hearing what former Qwest Joe Nacchio has to say when he gets out of prison in a lot fewer than the six years to which he was sentenced.
I say this because we have never fully heard his side of the story – just bits and pieces that were not allowed into the court record.
After his guilty verdict on insider trading charges in 2007, Nacchio said three words to me on his way out of the courtroom: “It’s not over.” And indeed it’s not.
Nacchio, who has always maintained his innocence, won a small victory today from the 10th Circuit Court of Appeals in Denver. Click here to read the details in the Wall Street Journal. Bottom line: His prison sentence is likely to be reduced significantly as will the $52 million in stock sale proceeds he was ordered to forfeit.
Meanwhile, let’s not forget his long-shot bid to have his case heard before the U.S. Supreme Court. So far, no word from the Court as to whether it will hear his case, but the Court could make a decision as early as September.
Nacchio’s best argument before the Court challenges the definition of the word, “material” given to jurors. The “material” non-public information Nacchio was said to have held when he traded his stock was that his projections for growth as Qwest could not possibly be met.
This resembles the old, pump and dump, of course. But Nacchio’s position is that nobody should be felonized for trying to predict the future and getting it way wrong.
It’s a salient point. Usually insider trading cases revolve around more concrete non-public information, such as a merger or a key regulatory approval falling through. Promising 15% growth, and then getting shrinkage instead as the market implodes, might be a civil matter but now a crime.
The part of Nacchio’s story I want to hear, though, is his accusation against the federal government. He has more or less claimed that the Feds came after him because he refused to allow them to tap Qwest’s phone lines and listen to just about anything they wanted in the name of catching terrorists after 9/11. I first wrote about this in 2006. Click here to see the column.
I’m not saying Nacchio was a saint, or even a pure-hearted civil libertarian, but the record is clear: Nacchio was the only telecom executive who stood up to the Bush administration. The rest of them had to seek protection from civil lawsuits under a telecommunications immunity act passed by Congress.
Now, if Nacchio were giving jailhouse interviews, I’m guessing he’d say that I was part of the posse responsible for where he is today. I, of course, never advocated or even imagined a criminal trial. I just thought he was a blustering CEO and it was easy to challenge his rosy rhetoric. Sorry Joe, but that’s what I do.
Anyway, all I can say now is, hang in there, Joe. Look forward to hearing the rest of your harrowing tale when you get out.
