AUSWR
The Association of U S West Retirees
 

 

 

SEC to review, perhaps trim, Qwest fraud suit
By Sandy Shore, Associated Press
Denver Post
Wednesday, February 5, 2008

Federal regulators agreed Monday to review and perhaps streamline their civil fraud lawsuit against former Qwest executives so the allegations would not involve the telecom's secret business dealings with clandestine government agencies.

During a federal court hearing, Securities and Exchange Commission attorney Polly Atkinson said the bulk of the charges against former chief executive Joe Nacchio and four others rely on historical data, not prospective government contracts.

However, she agreed to review the lawsuit at U.S. Magistrate Craig Shaffer's request. Shaffer gave the SEC 30 days for the review.

The judge's comments came as he considered a request from the Justice Department to prohibit the release of material related to secret Qwest negotiations, arguing that it would jeopardize national security.

The SEC has said the defendants' actions allowed Denver-based Qwest to improperly report approximately $3 billion in revenue that helped clear the way for its 2000 acquisition of the regional phone company U S West.  The revenue was later restated.

The classified government material at issue is based on Nacchio's claims that Qwest would be in line for lucrative business contracts that gave him hope for the telecom's financial future.

Attorneys for the defendants in the civil trial told Shaffer on Monday that the secret documents may or may not be part of their defense on some of the allegations.

Besides Nacchio, the defendants are former finance chief Robert Woodruff, former president Afshin Mohebbi and former accountants James Kozlowski and Frank T. Noyes.

http://www.denverpost.com/search/ci_8168634