Securities & Exchange Commission is all set to sue former Qwest executives including former CEO Joe Nacchio for his alleged involvement in the IRU fraud and hence forth bringing down the former high flyer to its knees. Others who could be sued include former financial officers Robert Woodruff and Robin Szeliga, former COO Afshin Mohebbi and former wholesale sales chief Greg Casey. Denver Post reports that in some cases “SEC will sue corporate executives seeking damages equal to profits those executives made on suspect deals.”
Over the past year, a number of former Qwest executives have received ‘Wells notices’ from the SEC. Such notices state the agency is considering suing for violations of securities laws. Among the recipients were Nacchio and Mohebbi. Other former executives who got notices are Susan Chase, William Eveleth, Deborah Petrie and Kym Smiley.
Rocky Mountain News says that a total of 15 executives might be part of this legal action. The irony is that the news of this comes on the fifth anniversary of the bursting of the bubble. Broadbandits have destroyed many lives, especially those of retirees who saw their pension funds eviscerate. The SEC is taking a swipe at former Qwest executives who were involved in fraudulent round-tripping IRUs worth more than a billion dollars with other companies like Global Crossing and Cable & Wireless.
Regulators are racing to file the actions by next week to beat the five-year statute of limitations related to Qwest’s 1999 10-K annual report, which allegedly was altered just prior to being filed with the SEC on March 17, 2000. Someone deleted a key section for investors concerning Qwest’s controversial fiber-optic capacity deals, according to two sources familiar with the situation. (Rocky Mountain News)