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Qwest to settle shareholder suit for an additional $40 million

[JURIST] Qwest Communications [corporate website] will pay an additional $40 million to settle a class action shareholder lawsuit, according to an agreement released Monday in the company's second quarter earnings report [press release; materials]. Of that number, $5 million comes from insurance revenue by former Qwest CEO Joseph Nacchio [JURIST news archive] and former CFO Robert Woodruff. In 2006, a federal judge approved a $400 million settlement [AP report] that did not include Nacchio or Woodruff, but the two former Qwest officials appealed, arguing that Qwest was required to indemnify them from future litigation. A federal court must still approve the new settlement terms. AP has more.

Federal prosecutors indicted Nacchio in December 2005 on 42 counts of insider trading [JURIST report]. He and other former Qwest executives still face civil fraud charges [JURIST report] brought by the US Securities and Exchange Commission [official website] on allegations that Qwest improperly reported approximately $3 billion in revenue related to its 2000 merger with US West. Another former Qwest employee, ex-vice president Marc Weisberg, pleaded guilty to wire fraud [JURIST report] in December 2005 and helped prosecutors build their case against Nacchio.
Last month, the US Court of Appeals for the Tenth Circuit [official website] granted [order, PDF] prosecutors' petition for an en banc rehearing on whether Nacchio's insider trading conviction should be overturned. In March, a Tenth Circuit panel struck down [ruling, PDF; JURIST report] Nacchio's previous conviction and ordered a new trial.

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Paper Chase is JURIST's real-time legal news service, powered by a team of 30 law student reporters and editors led by law professor Bernard Hibbitts at the University of Pittsburgh School of Law. As an educational service, Paper Chase is dedicated to presenting important legal news and materials rapidly, objectively and intelligibly in an accessible format.

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