U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19134 / March 15, 2005
Accounting And auditing Enforcement
Release No. 2207 / March 15, 2005
SECURITIES AND EXCHANGE COMMISSION v. MARK A. SCHUMACHER, Civ. No. 05-N-483 (OES)(USDC D. Colorado).
The United States Securities and Exchange Commission ("Commission") announced that on March 15, 2005, it filed a complaint in the United States District Court for the District of Colorado against Mark A. Schumacher, the former controller of Qwest Communications International, Inc. ("Qwest"). Schumacher consented to the issuance of a Final Judgment ordering him to pay a $40,000 civil penalty, without admitting or denying any of the allegations in the complaint.
The Commission's complaint alleged that Schumacher violated Section 13(b)(5) of the Securities Exchange Act of 1934 ("Exchange Act") and Exchange Act Rule 13b2-1, and caused Qwest's violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Exchange Act Rules 12b-20, 13a-1, 13a-11 and 13a-13 in connection with Qwest's: (1) improper recognition of revenue from sales of irrevocable rights of use (IRUs) for the company's fiber optic cable and capacity during fiscal year 2001; and (2) improper disclosures concerning revenues from the company's telephone directories in Qwest's annual report filed with the Commission for the fiscal year 2000 and quarterly reports filed with the Commission for the first three quarters of 2001.
In a related matter, a cease-and-desist order ("Order") was issued against Schumacher, ordering him to cease and desist from committing or causing any violations and any future violations of Section 13(b)(5) of the Exchange Act and Exchange Act Rule 13b2-1, and from causing any violations and any future violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Exchange Act Rules 12b-20, 13a-1, 13a-11 and 13a-13. Schumacher undertakes to cooperate in any related judicial or administrative proceeding or investigation commenced by the Commission or to which the Commission is a party. Schumacher consented to the issuance of the Order without admitting or denying any of the findings in the Order. [In the Matter of Mark A. Schumacher, Sec. Exch. Act Rel. No. 34-51373.]
SEC Complaint in this matter