Five years after the drunken telecommunications spending craze ended, the industry is still cleaning up after the party. On Friday, the Wall Street Journal reported that the Securities and Exchange Commission plans to file civil charges against Joseph Nacchio, the former CEO of Qwest Communications, as early as next week.
It's little surprise that regulators would come after Nacchio, since it's no secret that he and several other Qwest executives have been under investigation for some time. The exact charges of the SEC case aren't yet known, but the SEC is expected to accuse Nacchio of falsely representing Qwest's financial condition, particularly its ability to meet aggressive revenue goals during the boom of the late 1990s, said the WSJ article.
Meanwhile, a jury in a federal case against former WorldCom CEO Bernard Ebbers is still deliberating in New York City. Ebbers, 63, is on trial for allegedly directing the $11 billion accounting fraud that led to WorldCom's collapse and the largest bankruptcy in U.S. history. He is accused of conspiracy, securities fraud, and seven counts of lying to the SEC. He faces 10 years in prison if convicted of the fraud charge and for each of the false-statement counts. He also faces five years on the conspiracy charge, according to Bloomberg news reports.