Szeliga charged with insider trading
By Greg Griffin, Staff Writer
Denver Post
Thursday, June 2, 2005

Denver - Federal prosecutors charged former Qwest chief financial officer Robin Szeliga with one count of insider trading today in connection with her exercise of 10,000 stock options in April 2001.

Szeliga, 44, has reached a plea agreement and will cooperate with prosecutors investigating allegations of wrongdoing stemming from an accounting scandal at the telephone company, officials with the U.S. Attorney's office said.  Terms of the agreement were not disclosed.

According to a criminal information filing made in federal court in Denver today, Szeliga allegedly sold the stock with knowledge that the company would not make its earnings targets for the first and second quarters of 2001.  She knew, according to federal authorities, that the company would make up for its revenue shortfall by counting one-time sales of fiber-optic capacity as recurring revenue.

Szeliga exercised 10,000 options and sold the shares at $41 each for a total of $410,000, the filing said, earning her $125,000 in net pre-tax profit.

Szeliga is scheduled to appear before U.S. District Court Judge Walker Miller at 9 a.m. July 14 for a change of plea hearing.

Szeliga's attorney did not immediately return a call for comment.

On Wednesday, Szeliga and four other former Qwest officials asked the federal court to dismiss civil charges of fraud made against them by the U.S. Securities and Exchange Commission.  The SEC case alleges the officials inflated Qwest revenues by $3 billion through one-time sales of fiber-optic network capacity, while enriching themselves by selling stock.

Szeliga is the highest-ranking former executive from Qwest Communications International Inc. to be charged in the government's criminal investigation of the Denver-based company.