to send checks to Qwest investors
By Greg Griffin, Staff Writer
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
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
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'
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