Pennsylvania Public School Employees' Retirement System, Harrisburg, has filed a securities fraud lawsuit against Qwest Communications International Inc., Denver, and several of the company's former directors and employees, confirmed Evelyn Tatkovski, PennPSERS spokeswoman. The complaint, filed earlier this month in the U.S. District Court in Philadelphia, claimed that the $57 billion retirement system purchased shares of Qwest common stock "at prices that were artificially inflated due to Qwest's improper financial reporting" from 1999 to 2002. PennPSERS also named Qwest's former auditor, Arthur Andersen, as a defendant in the suit.
The system alleged that it lost more than $10 million in 2002 when Qwest restated previously issued financial statements, causing the value of its stock to decline more than 80%, according to the filing.
Qwest spokesmen did not return calls by press time seeking comment on the lawsuit.