Robert Woodruff Case: SEC Reaches Settlement With Former Qwest CFO
DENVER -- The Securities and Exchange Commission has reached a settlement with former Qwest Communications International Inc. Chief Financial Officer Robert Woodruff over its civil fraud lawsuit.
Woodruff agreed to settle without admitting or denying allegations that he and others gave investors a skewed impression of the company's performance between 1999 and 2002, according to court documents. He would be ordered to pay a disgorgement of $1.7 million, interest of about $640,000, and a $300,000 fine under terms of a proposed final judgment.
The SEC also has agreed to dismiss similar claims against former Qwest accountant Frank Noyes, with the parties bearing their own legal costs over years of litigation.
"Mr. Woodruff is happy to put this matter behind him," his attorneys John Carroll and Steven Glaser said in a written statement Friday.
"After six long years, Mr. Noyes has been vindicated. Vindicated at last. This is how it should have ended," Noyes' attorney, Forrest Lewis, said in an email.
A phone message left at the SEC office in Denver wasn't immediately returned.
Woodruff and Noyes were the last remaining defendants in a lawsuit the SEC filed in 2005 accusing former Qwest executives and employees of fraud or insider trading. Some defendants had claims against them dismissed while others, including former Qwest CEO Joseph Nacchio, reached settlements.
The lawsuit was filed months after Qwest agreed to pay $250 million to settle SEC allegations of "massive financial fraud."
Nacchio settled with the SEC after he was sentenced to five years and 10 months in prison for insider trading convictions in a criminal case. His criminal sentence also ordered him to pay $63.6 million in fines and forfeitures.
The SEC had alleged Woodruff misled investors by not specifying how much of the company's revenues were from one-time sales and how much was recurring.
Noyes was accused of helping Qwest improperly record revenue for a quarterly period ending Sept. 30, 2001, by backdating a contract that was signed Oct. 1, 2001. Noyes' attorney had said the deal was essentially done late Sept. 30, 2001, but was signed a few hours after midnight.
CenturyTel Inc. completed its purchase of Qwest last year.