Qwest exec reaches tentative SEC deal
AOL Business News
Wednesday, February 15, 2005
SAN FRANCISCO, Feb 15 (Reuters) - A former Qwest Communications International Inc. executive has reached a tentative deal to settle a lawsuit charging he hid inflated revenues that helped the telephone company meet Wall Street projections, according to a court filing on Tuesday.
The U.S. Securities and Exchange Commission said in a federal court filing in Denver that it had reached a tentative deal with the attorney for former Qwest executive Michael Felicissimo that would resolve the entire lawsuit.
In July, the SEC sued Felicissimo, former chief financial officer at Qwest's wireless division for refusing to restate or correct improperly recognized revenue of $112 million between January 2000 and Sept. 30, 2002.
Neither Felicissimo's attorney nor the SEC could be reached for comment.
The Denver-based regional telephone company fired the executive in September 2002 when it learned of his conduct regarding the improper accounting, the SEC said when it filed the case.
The potential settlement marks the latest legal turn after the SEC and the U.S. Justice Department began investigating Qwest's accounting practices in 2001.
Qwest, the No. 4 U.S. regional telephone company, in October agreed to pay $250 million to settle financial fraud charges. It also agreed to have a permanent chief compliance officer to make sure the company obeys federal securities laws.
The SEC has said that between 1999 and 2002, Qwest fraudulently recognized more than $3.8 billion in revenue and excluded $231 million in expenses, all part of a multifaceted scheme to meet optimistic and unsupportable revenue and earnings projections.