Without providing details, a lawyer for former Qwest finance chief Robin Szeliga said that her deal with the Securities and Exchange Commission had collapsed.

In July, Szeliga pleaded guilty to one count of insider trading and admitted to selling 10,000 shares of Qwest stock in 2001, for a net profit of $125,000, based on nonpublic information. Her testimony was expected to be a key part of the government's case against former Qwest chief executive Joseph Naccio.

In March the SEC accused Szeliga, Nacchio and five other former executives of orchestrating a financial fraud that forced Qwest to restate billions of dollars in revenue. The SEC wants repayment and civil penalties from all seven, with amounts to be determined at trial.

Nacchio was indicted in December on 42 counts of insider trading for allegedly illegally selling more than $100 million in stock in December, and has pleaded not guilty to the charges.

The SEC has said that the fraud occurred between April 1999 and March 2002, allowing as much as $3 billion in revenue to be improperly reported as recurring, driving up the company's stock price as executives made millions selling off their own shares. Qwest eventually restated earnings from 2000 and 2001 to erase about $2.2 billion in revenues.

The No. 4 local telephone company in the country agreed to pay $250 million in 2004 to settle SEC fraud allegations. Nacchio resigned in June 2002.

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access