The Securities and Exchange Commission has begun distributing $267 million to about 200,000 investors from the fund it set up as part of its settlement with Qwest Communications over allegations of accounting fraud.

The SEC set up the Qwest Fair Fund after bringing a settled enforcement action against the telecommunications firm in October 2004. The commission alleged that Qwest inflated revenue by $3.8 billion and fraudulently excluded $231 million in expenses.

Qwest neither admitted nor denied the allegations but agreed to pay a $250 million penalty. Several former Qwest executives also paid settlement money into the fund.

The SEC is still pressing forward with litigation against two other former Qwest executives, CEO Joseph P. Nacchio and senior vice president Joel M. Arnold. They may ultimately put some of their money into the settlement fund as well.

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