SEC reaches settlement with former Qwest CEO Joseph Nacchio in civil case

Friday, September 3, 2010

SEC reaches settlement with ex-Qwest CEO Nacchio

DENVER — The Securities and Exchange Commission has reached a settlement in its civil lawsuit against former Qwest CEO Joseph Nacchio.

The suit accused Nacchio and other former executives at Denver-based Qwest Communications International Inc. of misleading investors by not specifying how much of the telecommunication company’s revenue between 1999 and 2002 was one-time and how much was recurring.

A federal judge must approve the settlement. Documents filed Thursday in federal court in Denver show Nacchio wouldn’t admit guilt but would agree never to serve as an officer of a public company again.

Nacchio’s attorney didn’t immediately return a message Friday.

Nacchio previously was fined $19 million and ordered to forfeit $44.6 million on criminal insider-trading convictions.

In 2007, he was sentenced to six years in prison and ordered to forfeit $52 million and pay a $19 million fine, but the 10th U.S. Circuit Court of Appeals ruled the trial judge miscalculated Nacchio’s gains from insider trading.

In June, a different judge shaved two months and $7.4 million from that sentence. Nacchio is in the Federal Correctional Institution Schuykill in Minersville, Pa.

The proposed settlement of the civil case calls for not imposing a civil penalty on Nacchio because of the criminal sanctions. He would waive his right to appeal the $19 million fine.

Federal officials have proposed transferring the $44.6 million to a fund to distribute to harmed Qwest investors.

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