Former Qwest CFO Charged with Insider Trading

Robin Szeliga, the former CFO of Qwest Communications International Inc., has been charged with one count of insider trading, federal prosecutors announced Thursday.

Prosecutors allege Szeliga had information about her employers true operating performance and financial condition that was not disclosed to the public when she sold 10,000 shares of Qwest common stock, netting a profit of $125,000.

Szeliga has reached a plea agreement and will cooperate with prosecutors investigating allegations related to an accounting scandal at Qwest, the Associated Press reported, citing acting U.S. Attorney Bill Leone. A change of plea hearing is scheduled for July 14.

According to the complaint, Szeliga knew various Qwest business units were not going to meet revenue targets and expectations for the first two quarters of 2001. Prosecutors also allege the former CFO had knowledge that Denver-based Qwest could only meet its guidance through the use of nonrecurring revenue sources.

Szeliga also faces civil fraud charges in a case filed by the Securities and Exchange Commission, the AP reported.

Last year, Qwest agreed to pay a $250 million penalty over government accusations that it fraudulently recognized more than $3.8 billion in revenue and excluded $231 million in expenses between 1999 and 2002 as part of a strategy to meet revenue and earnings projections. That concluded a 2-½ year investigation of the telecommunications carrier, although the SEC said it would continue an investigation to determine which individuals were responsible for what the government claims was an enormous fraud.

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