settlement talks with 5 ex-Qwest officials
The agency sued 12 for fraud and has settled with 6
By Andy Vuong, Staff Writer
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
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
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 email@example.com.