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Comment by LogonType10 | Hacker News Reader

>jailed for not complying with the illegal requests of the surveillance state

From the wiki page:

>On March 15, 2005, Nacchio and six other former Qwest executives were sued by the U.S. Securities and Exchange Commission. They were accused of a $3 billion financial fraud between 1999 and 2002 and of benefiting from an inflated stock price.

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> In its case, the government stated that Nacchio continued to tell Wall Street that Qwest would be able to achieve aggressive revenue targets long after he knew that they could not be achieved.

Interesting that Nacchio was prosecuted for this but almost no one else is.

The very same article states that he was found to have produced false accounting records and talked up the company's outlook despite knowing it was losing business and selling his own shares. He got caught on the insider trading.

There's nothing noteworthy here.

It was well known in telecom at the time this was due to the nsa situation. Don't always take things at face value.

> Don't always take things at face value.

You are literally presenting an opinion at face value ...

Something is not an opinion just because you don't believe it.

He could easily have just acknowledged what happened and not sold all of his stocks to avoid insider trading while the nsa situation still happened. It's nice that he refused the nsa. Doesn't absolve him of other fraud.

Wasn't there a gag order involved?

That does not prohibit you from being honest in your public statements about the financial health of the company, nor does it prevent you from following the same insider trading rules as everybody else.

As I understand it, the explanation of the "false accounting records" and "losing business" had to do with expected government contracts vanishing because of refusing to cooperate about the NSA surveillance.

Losing a contract with the NSA because they didn't play with the NSA certainly sounds like a real thing. Telling the markets that they would continue to see national security contracts when he knew they would not is another. Presenting false accounting records is entirely unrelated and just banal fraud. Selling your own shares while doing these things is even worse.

This really closes the loop. If the Feds cancelled contracts because of Nacchio's refusal to do business and then indicted him on fraud because he probably could not tell others that those contracts were cancelled (as with other similar wiretap/NSL requests)...

That seems like a colossal Catch-22.

That's ridiculous. There's no NDA in the world that prevents you from disclosing the true financials of your company. You don't need to specify who you're serving. His charge of insider trading is because he blatantly lied about the company doing well to inflate the price while selling his shares knowing it was not.

That's exactly the kind of wording that NSLs require. It's why the idea of a "warrant canary" [1] came into existence.

As to the selling of shares - prima facie, that's likely criminal (insider selling) but I don't know the details of his case.

[1] https://en.wikipedia.org/wiki/Warrant_canary

No, it absolutely is not. Not even close. Love for clever little hacker things does not carry any weight here. How could you possibly believe that it would have been illegal for this company to correctly state the amount of revenue it received?

You do not need to acknowledge that you received an NSL in order to acknowledge you are no longer providing services to the NSA. You do not need to reference the NSA or NSL at all in order to correctly state revenue, because you are not required to show all of the entities with which you're doing business.

It is fully possible to pretend you simply lost the NSA contract for non-NSL related reasons. His fraud is his own doing

So if I'm piecing this together correctly, he decided he wasn't going to help out NSA. This led to him losing government contracts, which would lower the value of his company. So instead of taking the stock price hit (which would be the principled thing to do), he created false accounting records to defraud investors. And while he was publicly preaching that the Qwest was just fine, he was unloading his own stock.

And this is the guy I'm supposed to be sympathetic of?

It was well known why Google got rid of their "don't be evil" tagline... except now nowhere on the internet seems to have a record of the exact reason either...

These kinds of stories get 'forgotten' very quickly.

what on earth is this trying to imply? That google bleached the internet? Google got rid of the don't be evil tagline because it didn't fit with their corporate mission anymore, which was objectively more boring and more profit driven.

they're probably implying it was a sort of warrant canary or that they did not comply with overreaching government wiretap requests (the assumption being that now they do).

I find that to be a pretty charming belief. It's probably correlated timeline wise with when such things did change on that, but I highly doubt it was the reason for the mission statement change.

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