US SEC Settlement With
Ex-Qwest Exec Finalized
Dow Jones Newswire
Friday, April 29, 2005
DENVER (AP)--A federal judge finalized a settlement Thursday between the Securities and Exchange Commission and a former Qwest Communications Inc. (Q) executive who was named in a civil fraud lawsuit.
Without admitting wrongdoing, William Eveleth, former senior vice president of finance, agreed to pay about $111,000 and to forgo serving as a director or officer of any public company for five years.
U.S. District Judge Richard Matsch said he called Eveleth to the Denver courtroom from Gulf Breeze, Fla., where Eveleth moved in 2003 and set up a consulting business after resigning from Qwest, to make sure he understood terms of the deal and the potentially harsh consequences of violating them.
"I don't want anybody to stick his neck out until he understands," Matsch said.
"From my perspective, I am agreeing to obey the law and securities rules, and I've never had a problem with that," Eveleth responded.
Violations could result in civil or criminal contempt charges, Matsch said.
Eveleth was one of eight Qwest defendants named in an SEC lawsuit filed in February 2003 alleging accounting fraud. The lawsuit alleged he was involved in a September 2000 deal with Genuity Inc. that added $100 million in revenue and $ 80 million in profits to Qwest's financial results.
Genuity, also a telecommunications company, filed for bankruptcy protection in 2002.
The SEC said the deal was structured to allow Qwest to improperly book the revenue and profits immediately. A single transaction for Internet equipment and services was split into two to allow Qwest's global business unit to meet its quarterly revenue goals, the agency alleged.
The agency said Qwest paid Genuity a $4 million bonus for signing off on the deal before the end of the quarter.
The SEC announced in March it had settled complaints with Eveleth and four other former Qwest executives. At the same time, the agency said it was filing suit against former Qwest chairman and chief executive Joseph Nacchio and six other former executives for alleged fraud. Attorneys for the seven have denied their clients did anything wrong.
SEC attorneys told Matsch that penalties and other payments from the settlements and any court judgments will go into a fund that will be distributed among investors.
Qwest has already paid the first half of its $250 million settlement with the SEC, announced last fall, agency attorneys said.
Dow Jones Newswires 04-28-051949ET