AUSWR
The Association of U S West Retirees
 

 

 

SEC has settlement talks with 5 ex-Qwest officials
The agency sued 12 for fraud and has settled with 6
By Andy Vuong, Staff Writer
Denver Post
Thursday, January 11, 2007

The Securities and Exchange Commission has held preliminary settlement discussions with each of the former Qwest executives the agency has sued for fraud, an SEC attorney said Wednesday.

The SEC has settled with six of the 12 ex-Qwest executives it initially sued in March 2005 and recently reached a tentative deal with former chief financial officer Robin Szeliga.

The SEC is having settlement negotiations with the remaining defendants as required by federal rules, agency attorney Polly Atkinson said after a status conference Wednesday.  The discussions are "ongoing," she said.

The five ex-Qwest officials who haven't settled are former chief executive Joe Nacchio, former president Afshin Mohebbi, former chief financial officer Robert Woodruff and former accountants Frank Noyes and James Kozlowski.

Kozlowski's attorney, Phillip Douglass, characterized the talks as "informal discussions."

The settlement with Szeliga still requires approval fro SEC officials in Washington and could take months to finalize, according to a court filing.

The SEC alleges in its civil suit that the former Qwest executives fraudulently boosted revenues by $3 billion from 1999 to 2002.  Qwest later restated that revenue.  The SEC wants the executives to repay stock-sale profits, bonuses and, in some cases, salaries.

During the conference Wednesday, U.S. Magistrate Judge Craig Shaffer ordered attorneys for the defendants to submit confidential memos that detail the potential for a settlement.  He noted that only 2 percent of federal cases go to trial and asked whether scheduling a settlement conference would be helpful.

Atkinson said the SEC would p refer to hold a settlement conference after the conclusion of Nacchio's separate criminal trial, which is slated to begin March 19 and last up to 7 1/2 weeks.  Nacchio has pleaded not guilty to 42 counts of illegal insider trading connected to his sales of $100.8 million in Qwest stock in early 2001.

Two depositions have been taken in the civil case, Shaffer said.  More than a dozen others could be taken through April.

Shaffer set Aril 6 as the date for a conference to schedule how the trial will proceed.

Staff Writer Andy Vuong can be reached at 303-954-1209 or avuong@denverpost.com.

http://www.denverpost.com/business/ci_4988790