A federal judge on Thursday dismissed two claims made by the Securities and Exchange Commission in its civil fraud lawsuit against former Qwest Communications chief executive Joseph Nacchio, but gave the SEC two weeks to refile with more specific language.
U.S. District Judge Marcia Krieger refused to dismiss five other claims against Nacchio and SEC claims against other former Qwest executives.
Krieger said a claim alleging falsification of accounting records and a second claim alleging Nacchio aided and abetted Qwest’s failure to keep accurate records were not adequately argued.
The SEC alleged that Nacchio failed to publicly disclose that Qwest had false and misleading records regarding non-recurring revenue, but its allegations were not enough to argue that Nacchio caused the records to be falsified or aided and abetted in Qwest’s keeping of false records, Krieger wrote in her ruling.
Nacchio’s lawyers, some of whom are based on the East Coast, and a spokesman for federal prosecutors did not immediately return phone messages left Thursday afternoon.
Nacchio was one of several former top-level Qwest executives accused of orchestrating a financial fraud between April 1999 and March 2002 that allowed Qwest to improperly report about $3 billion in revenue that was later restated.
Nacchio also has been charged criminally with 42 counts of insider trading. He has pleaded not guilty.
