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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