SEC attacks Nacchio
By John Accola
Rocky Mountain News
Wednesday, June 22, 2005
Federal prosecutors delivered a scathing counterpunch Tuesday to former Qwest CEO Joe Nacchio's efforts to scuttle a lawsuit accusing him of securities fraud.
In a court filing in Denver, the Securities and Exchange Commission said Nacchio's upbeat public statements about the telco's financial performance between 1999 and 2002 were "part and parcel of a scheme to mislead investors."
Nacchio's defense attorneys maintain his off-the-mark financial projections to analysts and the media were not the stuff of securities fraud, but merely examples of "corporate optimism and puffery."
But the SEC's latest brief opposing Nacchio's motion two weeks ago to have the case dismissed says Nacchio must be held accountable for intentionally hiding the company's troubled finances up until his resignation in June 2002.
In its latest filing, the SEC criticizes Nacchio's attorneys for characterizing his public statements as vague, optimistic ramblings about the company's future.
Many of Nacchio's public comments constituted material misstatements and omissions about Qwest's past financial performance as well, the SEC said.