After nearly four weeks of testimony and six days of jury deliberations, former Qwest (NYSE: Q ) CEO Joe Nacchio has been found guilty of insider trading. Color me thrilled.
But not for the reason you think. I don't hate Nacchio. I pity him. He's a tragic figure born of a time of excess, and he's hardly the worst of the bunch. Enron's hucksters used outright theft as a business tactic. Former Tyco (NYSE: TYC ) chief Dennis Kozlowski, meanwhile, spent millions of shareholder dollars on toga parties and ice sculptures.
Nacchio is different. He let bravado trump his brain. He got greedy. A jury of his peers says that led him to break the law.
Nacchio was found guilty on 19 of 42 counts of insider trading, largely related to the events of April 24, 2001. On that date, two days after releasing first-quarter earnings for that year, Nacchio began a four-day stock-selling spree that netted him $34 million, according to The Denver Post.
Jurors told the Post that they didn't believe Nacchio was an innocent pumper at that point. Prosecutors had produced multiple witnesses, including former Chief Financial Officer Robin Szeliga, who testified that they had months earlier warned Nacchio that Qwest's financial targets were unsustainable.
But the bloviating Nacchio pressed on, reaffirming guidance and claiming in this press release that "Qwest is well-positioned for future growth." His huge stock sales followed that bluster. To the prosecutors, and ultimately the jury, that smelled like fraud.
His penance? As much as 10 years in prison, and $1 million in fines for each count. Nacchio will also be forced to pay restitution.
But don't feel too bad for Joe. According to the Post, which covered the trial here in Denver, Nacchio collected more than $250 million from stock sales during his five years running Qwest. The jury says that only $52 million of that was stolen.
We'll have to wait till July to find out whether Nacchio will be forced to trade in his business suit for an orange jumpsuit. I hope so. I may pity him, but he's more than a tragic figure. He's a convicted criminal whose greed led him to rip off his employees and shareholders.
We have these decked-out concrete suites for people who do that. They're called jail cells.
Fool contributor Tim Beyers, ranked 2,060 out of more than 27,300 in our Motley Fool CAPS investor-intelligence database, didn't own shares in any of the companies mentioned in this article at the time of publication. All of his portfolio holdings can be found at Tim's Fool profile. His thoughts on Foolishness and investing may be found in his blog. Tyco is an Inside Value pick. The Motley Fool's disclosure policy is happy to be lead counsel for your portfolio.