AUSWR
The Association of U S West Retirees
 

 

 

SEC asks judge to reject ex-Qwest CFO's motion to dismiss case
By Sandy Shore
AP
Money.aol.com
Friday, March 10, 2006

DENVER (AP) - Government attorneys asked a judge Thursday to reject a former Qwest finance chief's motion to dismiss a fraud lawsuit against her, saying the complaint provided sufficient details for the case to proceed.

Attorneys representing the Securities and Exchange Commission said the lawsuit lists dates and places of Robin Szeliga's actions as well as statements she made.

"Szeliga is on notice of the charges against her and she is able to answer and prepare a defense," the attorneys wrote in a brief.

The document filed in U.S. District Court was in response to a motion filed by Szeliga's attorneys asking a judge to order the SEC to provide details about the allegations or dismiss the claims.  They contended the SEC took a "smorgasbord" approach instead of providing specific allegations against individual defendants.

The lawsuit against Szeliga is proceeding after her tentative settlement with SEC officials collapsed.  The terms of that agreement were never made public.

Szeliga, former Chief Executive Officer Joseph Nacchio, former Chief Financial Officer Robert Woodruff and four other one-time executives were accused in March 2005 of orchestrating a massive financial fraud that forced Qwest Communications International Inc. to restate billions of dollars in revenue.

The SEC wants repayment and civil penalties with amounts to be determined at trial.  Former sales executive Gregory Casey is the only defendant who has settled, agreeing to pay $2.1 million.  He did not admit wrongdoing and agreed to cooperate with federal investigators.

In a separate criminal case, Szeliga is scheduled to be sentenced April 27 after pleading guilty last year to one criminal count of insider trading.

She was accused of improperly selling 10,000 shares of Qwest stock in 2001, earning a net profit of $125,000.  Authorities said she sold the stock knowing that some business units would fail to meet revenue targets and that the company had improperly used nonrecurring revenue to meet those goals.

The SEC has said the fraud at Qwest occurred between April 1999 and March 2002, allowing it to improperly report approximately $3 billion in revenue that helped clear the way for its 2000 acquisition of U S West.  The revenue was later restated.

Qwest agreed last year to pay $250 million to settle SEC charges of fraud in a deal that did not cover individual officers.

Denver-based Qwest is the primary local phone company in 14 Midwestern and Western states.

http://money.aol.com/news/articles?id=n20060309191909990002