A former Qwest finance chief who admitted to illegal insider trading as part of the company’s multibillion-dollar accounting scandal faces a trial on civil fraud charges because a tentative settlement with regulators has collapsed.
Robin Szeliga’s attorney did not elaborate when he advised a federal judge Thursday about her withdrawal from an agreement struck last summer with the Securities and Exchange Commission.
“We do not have a settlement,” attorney Mark Drooks said.
He agreed to file revised motions within 30 days. An SEC attorney declined to comment outside court.
Szeliga is expected to be a key government witness in the criminal case against former Qwest chief executive Joe Nacchio.
She may have withdrawn from the SEC deal over the financial costs or adverse effects to her career goals, according to lawyers who specialize in securities law.
The SEC in March accused Szeliga, Nacchio and five other former executives of orchestrating a financial fraud that forced Qwest to restate billions of dollars in revenue. The SEC wants repayment and civil penalties from all seven, with amounts to be determined at trial.
The SEC has said the fraud at Qwest occurred between April 1999 and March 2002, allowing it to improperly report approximately $3 billion in revenue that helped clear the way for its 2000 acquisition of U S West. The revenue was later restated.
Last year, Szeliga pleaded guilty to one count of insider trading, but sentencing was delayed as the government pressed its investigation into Qwest.
