DENVER, Nov 26 (Reuters) - A federal judge in Denver on Wednesday gave preliminary approval to a $445 million settlement between Qwest Communications International Q.N and shareholders who sued the telephone company for fraud in a series of cases filed beginning in 2001.
The investors, including large pension funds, had accused Denver-based Qwest and its executives of violating federal securities law in the wake of a multi-billion dollar accounting scandal.
They reached a proposed settlement with Qwest of $400 million in 2005, but payment of that sum was held up by appeals by the company’s former chief executive and chief financial officer.
In August, former Qwest CEO Joseph Nacchio and former CFO Robert Woodruff agreed to add an extra $5 million from insurance proceeds and Qwest pitched in another $40 million.
The judge on Wednesday ordered the parties to notify shareholders to allow them to file objections, and set a March 27 hearing “to determine whether the terms of the settlement as set forth in the stipulation are fair, reasonable, adequate” to the class.
Nacchio was convicted last year on 19 counts of insider trading. He was sentenced to six years in prison and fined $19 million and ordered to forfeit $52 million in stock sales.
A federal appeals court earlier this year overturned his conviction and ordered a new trial.
He remains free on bail while awaiting the outcome of an appeal by prosecutors to reinstate the convictions, or the start of a new trial. (Reporting by Robert Boczkiewicz, Editing by Ian Geoghegan)