AUSWR
The Association of U S West Retirees
 

 

 

SEC to send checks to Qwest investors
By Greg Griffin, Staff Writer
Denver Post
Wednesday July 07, 2007

 


The Securities and Exchange Commission plans to send checks totalling $267 million to 200,000 current and former Qwest shareholders beginning next week.

The payments launch a long-awaited disbursement from the SEC's civil lawsuits against the Denver phone company and its former executives.

The funds will be allocated proportionally to approximately 200,000 investors who purchased Qwest's securities between July 27, 1999, and July 28, 2002, and submitted valid claims to the court, the SEC said.

The money comes mainly from the SEC's 2004 settlement with Qwest, stemming from an investigation into accounting fraud under former chief executive Joe Nacchio. Qwest paid $250 million without admitting to the SEC's accusations that the company "fraudulently recognized approximately $3.8 billion of spurious revenue, and fraudulently excluded $231 million in expenses."

The victims' fund also includes money collected from other defendants in civil and criminal cases.  In May, former Qwest chief financial officer Robin Szeliga paid the SEC $577,000 to settle fraud charges against her.  She paid $125,000 in restitution after pleading guilty to criminal insider trading in 2005, money that also went into the fund.  An additional fine of $250,000 against Szeliga went into a different fund.

Others who settled with the SEC and paid restitution into the victims' fund include former Qwest executives Augustine Cruciotti, Roger Hoaglund, William Eveleth and Gregory Casey.

The government is seeking additional millions from Nacchio and several other former Qwest executives.

Nacchio was convicted of 19 counts of insider trading in April.  Prosecutors are seeking $19 million in fines and forfeiture of $52 million. The forfeiture money could end up in the victims' fund.

That issue could be decided Friday at Nacchio's sentencing in U.S. District Court in Denver.

The SEC today filed for permission from U.S. District Court Judge Wiley Daniel to begin mailing the checks from the victims' fund beginning July 31.  Daniel had not filed his order on the issue as of mid-afternoon.

Staff writer Greg Griffin can be reached at 303-954-1241 or at ggriffin@denverpost.com.