January 14, 2010
Former Qwest CEO reqwesting only a short prison stintAs detailed in this Denver Post article, which is headlined "Nacchio attorneys argue for short prison term," a high-profile white-collar offender is asking for a low-level sentence. Here are the details:
Attorneys for imprisoned former Qwest chief executive Joe Nacchio argue in a new court filing that his six-year sentence for illegal insider trading should be reduced to as little as six months.
A federal appeals court last year mandated a re-sentencing, ruling that the trial judge miscalculated when he ordered Nacchio to serve six years in prison and forfeit $52 million in ill-gotten gains and pay $19 million in fines.
Prosecutors argue that Nacchio's prison term should range from five years and three months to six years and six months. Nacchio reported to a federal prison camp in Pennsylvania last April, two years after a jury convicted him on 19 counts of insider trading connected to his sale of $52 million in Qwest stock.
In criminal securities cases such as Nacchio's, federal guidelines call for the prison sentence to be based on the amount of money Nacchio is calculated to have gained from having insider information while making the the illegal stock sales.
A study conducted by business-law professor Daniel Fischel claims the gain may have been zero, according to a sentencing statement Nacchio's attorneys filed late Tuesday. "Fischel's event study demonstrates that the maximum gain is $1.8 million, and his supplemental analysis shows that to be a conservative estimate and the gain might be as small as zero," the filing states.
A gain of $1.8 million would result in a guideline range of three years and five months to four years and three months. A gain of zero would result in a range from six months to 12 months.
Prosecutors claim Nacchio gained at least $32.9 million, based on a study conducted by finance professor Anjan Thakor. As part of the re-sentencing, Nacchio's attorneys claim he should be required to pay no more than $3.6 million in fines and $1.8 million in forfeitures.
January 14, 2010 at 09:37 AM | Permalink
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Nice headline on the Qwest executive. :)
Posted by: Brett Barrouquere | Jan 14, 2010 12:28:35 PM