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The Story Of Joseph Nacchio And The NSA

businessinsider.com

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Re: The Story Of Joseph Nacchio And The NSA

#11

Post by rayiner »

salem wrote: post #9
rayiner wrote: post #6

Earlier quoted context omitted.

Selling stock based on private knowledge of the company's deteriorating finances while trumping up the company publicly is not your run of the mill "everybody breaks the law" selective enforcement situation. The SEC brings tons of insider trading cases (the page you linked to points out that the ones on the page are just "examples"). See: http://www.mofo.com/files/Uploads/Images/130116-Insider-Trad... (Page 3.). The…

"The SEC brought 58 insider trading actions in FY 2012 against 131 individuals and entities." Seems like a small number to me considering the size of the market. The chances of being caught seems to be small indeed, unless someone is really looking. Speaking of Raj Gupta, he was connected with Raj Rajaratnam, who was funding a group with alleged close ties to the Tamil Tigers. I'm not saying there was no wrong doing,…

Note that the SEC tends to focus on public-company stuff, so the industry isn't that big. How many F500 c-suite execs are there?

Re: The Story Of Joseph Nacchio And The NSA

#12

Post by etherael »

tptacek wrote: post #8

This came up last week, too. Joseph Nacchio sold millions of dollars of Qwest stock after gaining access to information about weak future sales and, according to other Qwest insiders including the company CFO, being warned specifically about the future value of his shares. Nacchio also wasn't the only Qwest exec to get taken down in the probe, and, obviously, Qwest wasn't the only company to be probed and ultimately…

> Joseph Nacchio sold millions of dollars of Qwest stock after gaining access to information about weak future sales

"Gaining access to information about weak future sales" = He was threatened directly by the NSA that they would cut existing and not provide future contracts to the tune of approximately 3bn worth of revenue if he didn't play ball.

How is he supposed to notify the public of this fact when there's an implicit gag order in the requesting? So he has two options, take the financial hit for doing the right thing and telling them to go fuck themselves, or selling the stock and taking the legal hit for breaking insider trading laws.

Re: The Story Of Joseph Nacchio And The NSA

#13

Post by jessaustin »

I found this bit from the article interesting:

In July the FISA court ruled that the NSA violated the Fourth Amendment's restriction against unreasonable searches and seizures "on at least one occasion."

And yet I've read so many assurances from the legal eagles here on HN that since the relevant service providers already had these records, there was no way the Fourth Amendment applied. After all, it's just about your papers in your house! Because 18th Century!

Yeah, I knew that was bullshit, but it's nice to learn that even the craven, supine FISA court agrees. Try again guys!

Re: The Story Of Joseph Nacchio And The NSA

#14

Post by etherael »

jessaustin wrote: post #13

I found this bit from the article interesting: In July the FISA court ruled that the NSA violated the Fourth Amendment's restriction against unreasonable searches and seizures "on at least one occasion." And yet I've read so many assurances from the legal eagles here on HN that since the relevant service providers already had these records, there was no way the Fourth Amendment applied. After all, it's just about you…

Lawyers have this habit that they share with coders, when they are consulted as to why the system is behaving in a certain way, they treat it in an exercise in debugging legislature, and tracing the path of execution of case through the legal system, much like a coder will debug a program, and trace the path of execution through the computer, and the various methods and decision trees in the source.

The difference is though, when a coder finds out why the program is doing what the user doesn't want it to do, he will say "See, there you go, we can fix it now" where the lawyer will say "See, there you go, it turns out you're in the wrong because the law says so", the deeper embedded in the fabric of the legal profession they are the harder it seems to be for them to consider the possibility that although it's the law, it can still be utterly and completely wrong.

Re: The Story Of Joseph Nacchio And The NSA

#15

Post by wavefunction »

etherael wrote: post #12
tptacek wrote: post #8

This came up last week, too. Joseph Nacchio sold millions of dollars of Qwest stock after gaining access to information about weak future sales and, according to other Qwest insiders including the company CFO, being warned specifically about the future value of his shares. Nacchio also wasn't the only Qwest exec to get taken down in the probe, and, obviously, Qwest wasn't the only company to be probed and ultimately…

> Joseph Nacchio sold millions of dollars of Qwest stock after gaining access to information about weak future sales "Gaining access to information about weak future sales" = He was threatened directly by the NSA that they would cut existing and not provide future contracts to the tune of approximately 3bn worth of revenue if he didn't play ball. How is he supposed to notify the public of this fact when there's an im…

Wondering if he knew he was going to get railroaded and decided to both build up some cash reserves via "insider trading" and do the "right thing" at the same time wrt by declining to cooperate.

Re: The Story Of Joseph Nacchio And The NSA

#16

Post by etherael »

wavefunction wrote: post #15
etherael wrote: post #12

Earlier quoted context omitted.

> Joseph Nacchio sold millions of dollars of Qwest stock after gaining access to information about weak future sales "Gaining access to information about weak future sales" = He was threatened directly by the NSA that they would cut existing and not provide future contracts to the tune of approximately 3bn worth of revenue if he didn't play ball. How is he supposed to notify the public of this fact when there's an im…

Wondering if he knew he was going to get railroaded and decided to both build up some cash reserves via "insider trading" and do the "right thing" at the same time wrt by declining to cooperate.

At a guess he took a gamble, he made 3 million in salary in 2000, so the amount he sold was not trivial, even for him, he may have thought the government would not attempt to prosecute him, he may have thought if it came to trial the court would throw it out under the circumstances, he probably made a cost benefit analysis and acted upon it and ended up on the wrong side.

That's life.

EDIT: Interesting that this is downvoted, are you taking it as an indication that I'm attempting to say he got what he deserved with the above? That is not my intention, I'm simply pointing out that when you fight a bully, you often get a broken nose.

Re: The Story Of Joseph Nacchio And The NSA

#17

Post by jessaustin »

etherael wrote: post #16
wavefunction wrote: post #15

Earlier quoted context omitted.

Wondering if he knew he was going to get railroaded and decided to both build up some cash reserves via "insider trading" and do the "right thing" at the same time wrt by declining to cooperate.

At a guess he took a gamble, he made 3 million in salary in 2000, so the amount he sold was not trivial, even for him, he may have thought the government would not attempt to prosecute him, he may have thought if it came to trial the court would throw it out under the circumstances, he probably made a cost benefit analysis and acted upon it and ended up on the wrong side. That's life. EDIT: Interesting that this is d…

He also thought that he was safe doing what the vast majority of CEOs do on a regular basis. At the time of the stock sales he didn't realize just how much he was going to piss off the NSA in the next couple of years, much less how obedient federal prosecutors are to the NSA. It is impossible to become CEO of an ILEC without collecting a vast array of assets vulnerable to official attack. Nacchio might well have decided that the price he has paid was worth a clean conscience.

(I don't really think execs should be compensated with stock, but since they are you know they're going to be selling it regularly. Should they be prosecuted every time the price drops? Of course not, in fact they are almost never prosecuted.)

Re: The Story Of Joseph Nacchio And The NSA

#19

Post by tptacek »

etherael wrote: post #12
tptacek wrote: post #8

This came up last week, too. Joseph Nacchio sold millions of dollars of Qwest stock after gaining access to information about weak future sales and, according to other Qwest insiders including the company CFO, being warned specifically about the future value of his shares. Nacchio also wasn't the only Qwest exec to get taken down in the probe, and, obviously, Qwest wasn't the only company to be probed and ultimately…

> Joseph Nacchio sold millions of dollars of Qwest stock after gaining access to information about weak future sales "Gaining access to information about weak future sales" = He was threatened directly by the NSA that they would cut existing and not provide future contracts to the tune of approximately 3bn worth of revenue if he didn't play ball. How is he supposed to notify the public of this fact when there's an im…

Yes, he's expected to "take the financial hit." It is illegal for insiders to trade on secret information. You're not thinking it through carefully: Nacchio defrauded whomever bought his shares at their inflated price.

Re: The Story Of Joseph Nacchio And The NSA

#20

Post by tptacek »

jessaustin wrote: post #17
etherael wrote: post #16

Earlier quoted context omitted.

At a guess he took a gamble, he made 3 million in salary in 2000, so the amount he sold was not trivial, even for him, he may have thought the government would not attempt to prosecute him, he may have thought if it came to trial the court would throw it out under the circumstances, he probably made a cost benefit analysis and acted upon it and ended up on the wrong side. That's life. EDIT: Interesting that this is d…

He also thought that he was safe doing what the vast majority of CEOs do on a regular basis. At the time of the stock sales he didn't realize just how much he was going to piss off the NSA in the next couple of years, much less how obedient federal prosecutors are to the NSA. It is impossible to become CEO of an ILEC without collecting a vast array of assets vulnerable to official attack. Nacchio might well have deci…

I'm not sure why I'm expected to give a shit that lots of other CEOs are defrauding the public alongside people like Nacchio.
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