Qwest Communications International Inc. was one of the largest telecommunications companies in the United States. In 2004, the Securities and Exchange Commission charged the company with securities fraud for inflating revenue almost $2.5 billion for earnings projections between 1999 to 2002. The company was also criminally charged for issuing false statements to the public about its financial condition. This fraud scheme allowed the executives to reap millions in profits.
Former Qwest Communications Chief Executive Joseph Nacchio was indicted by a federal grand jury on 42 counts of insider trading and accused of illegally selling $101 million in company shares after privately learning that the company would not meet financial projections. After the public learned of the company's irregularities, the stock dropped from $60 per share to $1 per share. Nacchio was sentenced to 70 months in prison in 2007 and was ordered to pay a $19 million fine, in addition to forfeiting the $44 million made in the fraud scheme. The $44 million has been returned to the victims of the fraud scheme.
The SEC charged six other Qwest Communications executives and the company itself. The company settled the lawsuit by agreeing to pay $250 million for the SEC allegations.