Bob Fusfeld, who has overseen the Securities and Exchange Commission’s pending lawsuit against Joe Nacchio and other top Qwest executives, is retiring June 30, after 31 years with the regulatory agency.
“One of the things I will really regret is not being able to cross-examine Joe Nacchio,” Fusfeld told me. “That would have been the highlight of my career.”
Last year, the SEC filed a civil-fraud lawsuit against several Qwest executives: Nacchio; former chief financial officers Robert Woodruff and Robin Szeliga; former president and chief operating officer Afshin Mohebbi; former wholesale sales chief Gregory Casey; and accountants James Kozlowski and Frank Noyes.
The case attacks a management that misstated its revenues by $2.5 billion. But it remains on hold – possibly for years – pending the outcome of a criminal insider-trading case against Nacchio.
Fusfeld says the SEC case is in the good hands of colleagues. And it’s time for important things – like fly-fishing.
“I would like to see what else life has to offer other than the chance to work 80 hours a week,” Fusfeld said.
Fusfeld is only 55, but he’s had a long and trying career. For the past 15 years, he has worked as manager of litigation, overseeing SEC lawsuits in Colorado, Wyoming, Utah, Texas, Oklahoma, Arkansas, Nebraska and both Dakotas. Over his career, Fusfeld has handled everything from Ponzi schemes and penny-stock scams to complex frauds by major corporations. And it sounds like he’s tired.
“The practice of law has gotten really nasty in the last several years,” he told me. “Defense lawyers will say and do anything. … There’s an awful lot of scorched- earth litigation.”
Haven’t there always been nasty attorneys? “There are more of them (today) that weren’t breast-fed and are pathologically aggressive,” he said.
They clog the courts with meaningless motions, make accusations that are patently untrue, take harassing depositions – and they always seem to do this during the end of a month when they need to make their quota of billable hours.
“I can’t believe some of the things their clients pay for,” Fusfeld said.
Fusfeld grew up in Michigan, the son of an economics professor at the University of Michigan. He attended a law school that no longer exists – at Antioch College – and stumbled into his career by accident. Just out of law school in 1975, someone referred him to the SEC’s regional office in Washington, D.C. The SEC then needed to hire someone before planned budget cuts took place.
“They had a hiring freeze coming up, and I was a warm body,” Fusfeld said.
The SEC immediately put Fusfeld in charge of a case involving accounting improprieties at Geico. Geico’s defense attorney was Manny Cohen, a past SEC chairman. Fusfeld was in his 20s.
“He was the dean of the securities bar,” Fusfeld recalled, “but even though I was as new as can be, he treated me as if I’d been a lawyer for 50 years. I wish all lawyers treated their opposing counsel with this kind of respect.”
In the end, Geico did what most companies do when sued by the SEC – it settled, without admitting or denying guilt.
Over his career, Fusfeld has personally handled more than 50 cases that went to trial, and he has overseen work on hundreds more. He joined the SEC’s Denver office in 1981 when Denver was about to become known as the nation’s capital for penny-stock fraud. Firms including Blinder Robinson and Stuart James were fleecing clients out of millions through various stock-manipulation schemes.
“There were dozens of brokerage firms committing fraud every day of the week,” Fusfeld said. “It took us 10 to 12 years to clean that up.”
Over the years, Fusfeld has watched the SEC’s targets shift from stockbrokers to major companies, including Qwest.
In criminal trials, defendants cannot be ordered to take the witness stand. But in civil cases, they can. If the SEC’s case against Qwest executives goes to trial, several top Qwest executives will probably have some explaining to do.
“Someone once said that a good cross- examination in a courtroom, under oath, is one of the best methods of finding the truth,” said Fusfeld. “I believe that’s true.”
Al Lewis’ column appears Sundays, Tuesdays and Fridays. Respond to him at denverpostbloghouse.com/lewis, 303-820-1967 or alewis@denverpost.com.
