Qwest Communications International Inc. (NYSE:Q), a Denver-based provider of Internet, data, video, and voice services, has announced the preliminary settlement of the securities class action pending against the company in the D. of Colo. The case was originally filed in 2001 and alleges that Qwest engaged in sham transactions for fiber-optic network capacity to hide declining demand.
The settlement is for $400 million, with an additional $10 million to be paid by co-defendant Arthur Andersen. Qwest’s former CEO and CFO are also co-defendants in the case, but are not part of the settlement. According to the announcement, the settlement can be terminated under certain circumstances, “including in the event that the SEC elects not to distribute to the putative class members the $250 million penalty that Qwest has already committed to pay to the SEC.” Bloomberg has this report.
The 10b-5 Daily 