DENVER—A federal judge Thursday dismissed two former Qwest employees from a civil fraud lawsuit filed by the Securities and Exchange Commission and dismissed some claims against a former Qwest accountant.
However, Judge Marcia Krieger said the fraud claims against Chief Financial Officer Robert Woodruff could proceed to trial.
All four men had asked the judge to rule without a trial on the SEC’s allegations that they misled investors by not specifying how much of its revenue between 1999 and 2002 was one-time and how much was recurring.
Krieger ruled in favor of former Qwest Communications International Inc. President Afshin Mohebbi and former accountant James Kozlowski. She dismissed some claims against former accountant Frank Noyes but allowed others to continue.
The judge rejected Woodruff’s request for summary judgment, saying there is evidence “indicating, at the very least Mr. Woodruff’s recklessness with regard to misleading investors.”
The ruling shows the evidence didn’t support the claims against Mohebbi, said his attorney, Paul Grand.
“The simple fact is that Afshin Mohebbi was an exemplary executive who never should have been sued,” Grand said in a statement.
A pretrial conference in the case against Woodruff and Noyes is set for June 7. The court in January approved a settlement between the SEC and former Qwest CEO Joseph Nacchio that bars him from being an officer of a public company again.
Nacchio is serving a sentence of five years and 10 months in prison in Pennsylvania for his 2007 conviction of 19 counts of insider trading. He was also ordered to $44.6 million.
