Qwest Fraud Victims To Get $400 Each From $44M Payout
DENVER (CBS4) – Victims of former Qwest CEO Joe Nacchio’s insider trading will get some money back. But it won’t be much and for most it won’t even be close to what they lost.
The payout is $44 million Nacchio was ordered to forfeit as a result of his 2007 insider trading conviction. He misled investors about Qwest’s revenues and then sold millions of shares before the stock plummeted.
After the irregularities were discovered, Qwest stock, which had been traded as high as $60 per share, plummeted to about $1 a share.
The $44 million will be split up among more than 112,000 victims which amounts to just under $400 per person. Not everyone will get the same payout.
The government is using a formula based in part on how much each individual lost.
One woman considers it an insulting gesture.
“So what, it means nothing. It’s nothing,” said Qwest fraud victim Lyn Gallegos. “I just put it aside because it means that I have to read it and redredge it up, all those other feelings and emotions that I have.”
Gallegos worked for the phone company for 31 years. She said she lost about $150,000 out of her 401K.
“You never get that money back,” said Gallegos. “It’s a pay off. It’s kind of like blood money. You know what I mean? Ahh… go away.”
The Justice Department said all of the victims in the Qwest securities fraud case have been notified about the amount of money they will receive
“Now we’ve got to wait even six months. The rumor is six months. By then we won’t even remember what it was for,” said Gallegos.
She plans to donate that money to charity and hopes to put all the bad feelings about Qwest and Nacchio behind her.
In addition to the $44 million Nacchio forfeited to the U.S. he was also ordered to pay a $19 million fine. That money, by law, goes into a generic fund for victims of crime.
Nacchio is serving his 70-month prison sentence. He’s set for release in May 2014.
RELATED LINK: Those with questions about the Qwest distribution should contact the Remission Administrator at 1-877-268-3001 or visit their website at gilardi.com/qwestremission