SEC Announces Distribution of $267 Million Fair Fund to Qwest Investors Injured by Accounting Fraud
FOR IMMEDIATE RELEASE
Washington, D.C., August 1, 2007 - The Securities and Exchange Commission today announced that it has started distribution of the $267 million Fair Fund created as part of settlements with Qwest Communications International Inc. and several of its former executives. The funds will be distributed to approximately 200,000 investors who purchased Qwest's securities between July 27, 1999, and July 28, 2002. The distribution process is expected to be completed within five days.
"Since the 2002 passage of the Sarbanes-Oxley Act, the Commission has now returned more than $2.4 billion to investors," said Linda Chatman Thomsen, Director of the Division of Enforcement. "The Qwest Fair Fund is the latest example of our continuing commitment to ensuring that injured investors are compensated for their losses."
Donald Hoerl, Associate Regional Director of the Commission's Denver Regional Office, added, "We are pleased to begin the distribution of the Qwest Fair Fund. It is gratifying to see money returned to Qwest's investors, and we will continue our efforts on their behalf."
The Commission brought a settled enforcement action against Qwest in October 2004. In the complaint, the Commission alleged that Qwest fraudulently recognized more than $3.8 billion in revenue and excluded $231 million in expenses in order to meet ambitious revenue and earnings projections.
In the settlement agreement, Qwest neither admitted nor denied the Commission's allegations, but agreed to pay a civil penalty of $250 million that is being distributed to investors through the Fair Fund. Several former Qwest executives including Augustine Cruciotti, Gregory Casey, Roger Hoagland, William Eveleth, and Robin Szeliga also reached settlement agreements with the Commission and paid civil penalties and disgorgement into the Fair Fund. Szeliga additionally paid restitution into the Fair Fund after pleading guilty to one felony count of insider trading.
The Commission anticipates that cases currently being litigated, including SEC v. Joseph P. Nacchio, et al. and SEC v. Joel M. Arnold, et al., may result in more money being added to the Qwest Fair Fund.
Investors can obtain additional information about the distribution process by contacting the distribution agent:
- Call toll-free: 800-516-6339
- Visit the settlement Web site: www.gilardi.com/qwst1
- Write to: Gilardi & Co. LLC
P.O. Box 808003
Petaluma, CA 94975-8003