FOR IMMEDIATE RELEASE
July 28, 2006
FORMER QWEST CHIEF FINANCIAL OFFICER SENTENCED FOR INSIDER TRADING
DENVER – The United States Department of Justice, the Federal Bureau of Investigation, and the U.S. Postal Inspection Service announced that ROBIN SZELIGA, age 45, of Littleton, Colorado, was sentenced this morning by U.S. District Court Judge Walker D. Miller to two (2) years probation, with the first six (6) months to be served in home detention. SZELIGA had previously written check for $125,000 in restitution payable to the Securities and Exchange Commission (SEC) fund for the victims.
Judge Miller also ordered SZELIGA to pay a fine of $250,000, but ordered the fine stayed for 30 days while the defense and prosecutors examine ways to ensure that the $250,000 fine goes to the benefit of the Qwest shareholders.
On June 2, 2005, SZELIGA was charged by Criminal Information with one count of insider trading. On July 14, 2005, SZELIGA pled guilty to the the Information as charged.
According to the stipulated facts outlined in the plea agreement, SZELIGA was Qwest’s Chief Financial Officer (CFO). On April 30, 2001, while in possession of material, non-public information regarding Qwest’s true operating performance and financial condition, SZELIGA sold 10,000 shares of Qwest stock at $41 per share, obtaining gross proceeds of approximately $410,000, with a pre-tax gain of $125,000. SZELIGA has agreed to pay $125,000 in restitution to the SEC’s victim fund.
During 2001 and at other relevant times, the defendant was in possession of material, non-public information regarding Qwest’s true and actual operating performance and financial condition, obtained through, among other sources, internal documents and conversations and meetings with other executives. Part of this non-public information included the quality, nature, source and growth of Qwest’s revenue, which information the defendant knew and believed was important to the investing public.
The defendant knew that the various Qwest business units were not going to meet revenue targets and expectations for the first and second quarters of 2001 as portrayed to the investing public. The defendant further knew that Qwest was ultimately only able to meet its announced 2001 first and second quarter earnings expectations through the certain revenue sources, which Qwest classified as “non-recurring” and which were used as publicly undisclosed “gap-fillers” to meet revenue targets. SZELIGA pled guilty to selling Qwest stock knowing the true, complete and accurate information regarding the company’s financial condition.
The QWEST investigation is being conducted by the Federal Bureau of Investigation (FBI) and the U.S. Postal Inspection Service. The case was being prosecuted by United States Attorney Bill Leone and Assistant United States Attorney James Hearty. The Department of Justice Fraud Section assisted with the prosecution.
U.S. Attorney Bill Leone echoed statements made by Judge Miller. “Insider trading is a serious offense. The use of insider information is always a temptation to make money,” said U.S. Attorney Leone. “The judge in this case did an excellent job in balancing competing interests in making this difficult sentencing decision.”