On June 20, 2001, Morgan Stanley published a research report, "Qwest: Listening to the 10-K," that called into question some of Qwest's accounting practices since the merger with U S West. In addition, the Morgan Stanley analysts lowered earnings estimates and downgraded the stock. That day, Qwest stock fell over 9 percent intraday, later bouncing back by the close, amid heavy volume of 26 million shares—more than four times the average daily trading volume. Over the next few days, Morgan Stanley was blasted: nearly every competitor that covered Qwest published reports contradicting Morgan Stanley, in support of Qwest's accounting practices. Refuting the charges, Qwest issued numerous press releases and conducted a conference call, during which CEO Nacchio aggressively defended his company. Nacchio was later quoted as saying, "Innuendos on our integrity are not going to be tolerated, regardless of who makes them, including what I used to believe was a reputable firm, Morgan Stanley."
