DENVER—A judge has denied motions by former executives at Qwest Communications International Inc. to dismiss civil fraud claims made by the Securities and Exchange Commission.
The SEC alleges that five former employees of the Denver-based telecommunications company artificially inflated Qwest’s share price by misrepresenting one-time “IRU” sales as recurring revenue.
Former Qwest CEO Joseph Nacchio and former Chief Financial Officer Robert Woodruff have argued that classified information would show the U.S. intelligence community’s demand for Qwest IRUs was robust, but that the government has invoked the state-secrets privilege in refusing to disclose the information, thereby hampering their defense.
U.S. District Judge Marcia Krieger said in a ruling made available Friday that the defendants don’t need to broach the subject of classified IRUs in their defense.
She also denied a motion to dismiss claims against former Qwest President Afshin Mohebbi.
