The Association of U S West Retirees



Szeliga, Nacchio civil cases a go
A judge refuses to dismiss a suit against the ex-CFO of Qwest. Depositions are ordered for the ex-CEO.
By Sandy Shore, The Associated Press
Denver Post
Friday, September 29, 2006

A judge has refused to dismiss a civil fraud case against former Qwest finance chief Robin Szeliga, ruling that the complaint lacked clarity but provided sufficient details to allow her to respond properly.

"It is abundantly clear to the court that the securities fraud claims against defendant Szeliga arise from alleged misrepresentations and omissions in several discreet areas," U.S. District Judge Marcia Krieger wrote.

Her decision, issued Wednesday, came in the Securities and Exchange Commission lawsuit against Szeliga and several former executives of the Denver-based telephone company, including one-time chief executive Joe Nacchio.

On its heels, U.S. Magistrate Judge Craig Shaffer on Thursday ordered attorneys for both sides and prosecutors handling a criminal case against Nacchio to begin the arduous process of lining up depositions from about a dozen potential witnesses.

Shaffer acknowledged that some depositions will have to wait until Nacchio's insider- trading trial has ended next spring to preserve his fair-trial rights but noted the civil case must continue to proceed.

About a dozen employees and former employees of accounting firms that handled Qwest's business and former Qwest employees have been identified as potential witnesses who likely could undergo questioning without jeopardizing the criminal case against Nacchio.

Shaffer told the attorneys to finalize a list of those who could be questioned and start scheduling the process in early December.

He noted that while the SEC has been interviewing witnesses for several years, defense attorneys have not yet been able to question them.  "We should at least try to have a somewhat level playing field," he said.

Szeliga had asked Krieger to dismiss the allegations against her or to order regulators to provide more details.  She contended they took a "smorgasbord" approach instead of providing specific allegations against individual defendants.

SEC attorneys said the complaint stems from alleged misrepresentations about Qwest's fiber-optic-capacity sales and swaps, the sale of the Dex directory-publishing business and employee vacations, Krieger wrote in Wednesday's opinion.