Fund to Sue Qwest In Securities-Fraud Lawsuit
Dow Jones Newswires
The Wall Street Journal
Thursday, April 20, 2006
NEW YORK -- New York State Comptroller Alan G. Hevesi filed
a securities-fraud lawsuit against Qwest Communications
International Inc., its former top executives, several
former directors and its onetime auditor Arthur Andersen LLP,
alleging they conspired to artificially inflate the
company's financial results.
The lawsuit, filed in U.S. District Court in Manhattan,
alleges the Denver telecommunications company's revenue and
earnings were "significantly and materially" overstated
between March 31, 1999, and July 28, 2002.
Mr. Hevesi filed the suit on behalf of the New York State
Common Retirement Fund, a large pension fund for New York
public employees. He is the sole trustee of the fund. John
Chartier, a spokesman for Mr. Hevesi, said the pension
fund's losses as a result of the alleged manipulation of
Qwest's financial results were about $250 million.
Qwest's former Chief Executive Joseph Nacchio, a defendant
in Mr. Hevesi's lawsuit, is awaiting trial on 42 counts of
insider trading. He has denied wrongdoing.
The company agreed last year to pay $400 million to settle
separate shareholder lawsuits in federal court in Colorado.
Qwest previously agreed to pay $250 million to settle civil
charges brought by the Securities and Exchange Commission.
A Qwest spokesman declined to comment about the New York
case, saying the company's policy was to not speak about
pending litigation. An Arthur Andersen spokesman didn't
have a comment.
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