Former Qwest ( Q) CEO Joe Nacchio is negotiating with the New York Attorney General's office to settle allegations that he unfairly profited on IPO-spinning schemes. Though an agreement is not yet in hand, a person familiar with the discussions said a settlement could be reached in the coming weeks. Nacchio's attorney, Charles Stillman, denied that any negotiations are taking place. A spokeswoman from the Attorney General's office declined to comment on the matter. Nacchio is one of five telecom executives targeted by New York Attorney General Eliot Spitzer for his role in IPO spinning. Spitzer's office charges that the five executives were given allocations of red-hot IPO shares underwritten by Citigroup's ( C) Salomon Smith Barney investment-banking division. These shares, which typically tripled and quadrupled in value soon after they were sold to the public, were used to encourage the executives to steer investment-banking business to Solly. Spitzer's office is seeking to recoup a total of $28 million in profits that the telecom executives reaped on those red-hot shares, according to the original lawsuit filed in September. Spitzer's other targets include Bernard Ebbers, former CEO of WorldCom; Clark McLeod, former chairman of McLeod; and Stephen Garofalo, chairman of Metromedia Fiber. Ebbers was apparently the biggest profiteer in the spinning arrangements with Salomon. Spitzer's office is looking for $11 million in fines from Ebbers. Nacchio reaped at least $1.4 million in gains from his sale of some 15 IPO allocations, according to documents from Spitzer's office that were released in April. His largest profits came from sales of IPO shares of Juniper ( JNPR) and ONI, networking companies that supplied Qwest with telecom gear. Nacchio would be the second telecom executive to settle with Spitzer's office. Last month, Qwest founder and Nacchio's former boss, Phil Anschutz, satisfied the Attorney General's office by agreeing to give $4.4 million, or roughly the proceeds of his IPO gains, to charities. Observers say Nacchio probably will strike a similar arrangement.