Risk & Compliance

SEC Close to Charging Qwest Execs

Regulators reportedly need to bring charges by this week to beat the five-year statute of limitations related to Qwest's 1999 annual report, which ...
Stephen TaubMarch 14, 2005

The Securities and Exchange Commission is planning to bring civil charges against about a dozen former executives of Qwest Communications International Inc., including onetime chief financial officers Robert Woodruff and Robin Szeliga, stemming from the company’s accounting scandal, according to published reports.

The Wall Street Journal reported that former Qwest chief executive officer Joseph Nacchio also may be charged, citing people familiar with the matter.

Last fall, without admitting or denying the allegations, Qwest agreed to pay a civil penalty of $250 million to settle SEC securities fraud charges. The commission alleged that between 1999 and 2002, Qwest fraudulently recognized over $3.8 billion in revenue and excluded $231 million in expenses as part of a scheme to meet revenue and earnings projections.

More than a dozen former Qwest executives already have faced or settled civil or criminal charges, according to the Rocky Mountain News.

In February, former Qwest senior vice president Thomas Hall became the first person sentenced in the case. However, he received probation and was ordered to pay just a $5,000 fine. Hall pleaded guilty last year to a single misdemeanor count of falsifying documents, according to the Associated Press.

Hall, as well as three other former Qwest executives — Grant Graham, former chief financial officer for Qwest’s global business unit; Bryan Treadway, a former assistant controller; and John Walker, a former vice president — had faced 11 charges each, including conspiracy, securities fraud, wire fraud, and making false statements to auditors.

The News observed that regulators need to bring charges by this week to beat the five-year statute of limitations related to Qwest’s 1999 annual report, which was filed with the SEC on March 17, 2000.