NEW YORK—A class-action lawsuit has been filed in the United States District Court for the District of Colorado against Qwest Communications International Inc. claiming the company violated Section 10b of the Securities and Exchange Act of 1934 by issuing a series of materially false and misleading statements about the company’s financial results.
The lawsuit, filed by Rabin & Peckel L.L.P., alleges Qwest engaged in transactions designed to misleadingly increase the company’s revenues and decrease its debt.
“[Qwest] sold assets paid for by means of funds categorized as ‘capital expenditures’ and then categorized the proceeds received from the sale of those assets as ‘revenues,’ so that debt was understated and revenues overstated and the stock sold at a higher price than if the truth has been disclosed,” the law firm said in a statement.
