Qwest Communications International Inc. will pay $400 million to settle shareholder lawsuits stemming from the phone company's $3.8 billion accounting fraud.
Qwest will make payments in three installments, and the company's former accountant, Arthur Andersen LLP, will contribute $10 million, the company said, in a statement.
Based in Denver, the No. 4 U.S. local-phone company has now agreed to spend at least $650 million to settle claims related to bogus sales from 1999 to 2002. Last year, Qwest agreed to pay $250 million to settle fraud allegations from the Securities and Exchange Commission. The SEC has said that the accounting fraud occurred between April 1999 and March 2002, allowing as much as $3 billion in revenue to be improperly reported as recurring.The company still faces nine other shareholder suits. The settlement is with a group of investors represented by law firm Lerach Coughlin Stoia Geller Rudman & Robbins who bought shares between May 1999 and July 2002. The deal requires court approval, and the first payment of $100 million will come within 30 days of preliminary approval. Qwest said that the full payments will be made by January 2007.
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