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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

#4

Post by lmg643 »

this story has been floating around for a week or so now.

i remember when the qwest insider trading scandal first broke back in 2001 - it fit with the times - bernie ebbers, worldcom etc - corrupt telecom executives.

it is quite disturbing to think that a CEO might have been targeted in this way for refusal to cooperate with the NSA.

so much so, that i have a hard time believing that this is actually the case. lots of people in jail have elaborate theories for why they are innocent.

the market topped in 2000. spring of 2001 the market was already in serious trouble. nacchio would undoubtedly have known about earnings shortfalls that would occur as part of the implosion of the telecom bubble. the company had a number of accounting irregularities and was engaged in phony broadband deals with enron. qwest would not have escaped the market troubles with an NSA deal.

let's keep some perspective here people.

Re: The Story Of Joseph Nacchio And The NSA

#5

Post by salem »

rayiner wrote: post #3

...after "being convicted of insider trading in April 2007 for selling $52 million of stock in the spring of 2001 as the telecommunications carrier appeared to be deteriorating."

Selective enforcement?

There don't seem to be that many cases: http://www.sec.gov/spotlight/insidertrading/cases.shtml

Re: The Story Of Joseph Nacchio And The NSA

#6

Post by rayiner »

salem wrote: post #5
rayiner wrote: post #3

...after "being convicted of insider trading in April 2007 for selling $52 million of stock in the spring of 2001 as the telecommunications carrier appeared to be deteriorating."

Selective enforcement? There don't seem to be that many cases: http://www.sec.gov/spotlight/insidertrading/cases.shtml

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 SEC and DOJ together brought 86 insider trading cases last year. Two recent convictions were Raj Rajaratnam (hedge fund manager) in 2011, and Raj Gupta (former chief executive of McKinsey) in 2012. It's a favorite go-to for the SEC because it's relatively easy to prove as far as financial crimes go.

Re: The Story Of Joseph Nacchio And The NSA

#8

Post by tptacek »

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 prosecuted during the same time frame.

Re: The Story Of Joseph Nacchio And The NSA

#9

Post by salem »

rayiner wrote: post #6
salem wrote: post #5

Earlier quoted context omitted.

Selective enforcement? There don't seem to be that many cases: http://www.sec.gov/spotlight/insidertrading/cases.shtml

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, but something fails the smell test.

Re: The Story Of Joseph Nacchio And The NSA

#10

Post by tptacek »

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,…

Raj Gupta was a huge Democratic Party fundraiser, so much so that his status within the party was the lede in many stories written about the case. Yet it was a Democratic administration that he helped put into power that took him down.
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