A former Qwest Communications president testified at Joe Nacchio's insider trading trial that he repeatedly warned the then-CEO he was concerned about the newly combined telecommunications company meeting 2001 financial targets, an Associated Press report said.
The Associated Press report quoted the executive as saying that in a series of memos drafted to Nacchio in late 2000 and 2001, Afshin Mohebbi said one-time sales transactions would have to be used and that he believed recurring revenue would need to 'literally take off by April-May time frame' to meet the goals.
Mohebbi, testifying under a grant of immunity, told jurors that some meetings during that time grew heated as business unit managers tried to make targets set by Nacchio that they believed were unrealistic, the Associated Press report said.
In April 2001, Nacchio was unhappy that the company had been unable to meet the gap between revenue and financial targets, Mohebbi said.
Under cross examination by defense attorney Herbert Stern, Mohebbi acknowledged that the revenue was within the publicly stated goal, the report said.
Senior executives were told April 9, 2001, that they would miss a $21.8 billion internal budget forecast. The publicly stated financial target was $21.3 billion.
Mohebbi is one of the government's key witnesses against Nacchio, whose insider trial entered its third week.
Under cross examination by defense attorney Herbert Stern, Mohebbi acknowledged that the revenue was within the publicly stated goal and targets included in an investment banking study conducted as Qwest was working to finalize its merger with U S West, the report said.
Mohebbi said he received 1.1 million stock options shortly after the investment banking study was issued, second only to Nacchio, who received 9 million options, the report further said.