CalSTRS reached a $46.5 million settlement with Qwest Communications Inc., Denver, and former Qwest CEO Joseph Nacchio, confirmed Brenna Neuharth, spokeswoman. The lawsuit, filed in 2002 in California Superior Court in San Francisco, claimed Qwest misled the fund by artificially inflating its stock price in 2001, leading to total shareholder losses totaling roughly $1.6 billion. The California State Teachers' Retirement System, Sacramento, will get $45 million from Qwest, its accountants and banks, and $1.5 million from Mr. Nacchio. The settlement was reached in mid-November, but the terms required CalSTRS to wait until Jan. 31 to disclose any information.
"We pursued this case not only to recover losses to the fund that directly affect the financial futures of our members, but to reinforce our commitment to good corporate governance for the benefit of all shareholders," Jack Ehnes, CEO for the $157.8 billion fund, said in a news release. Qwest spokesman Robert Toevs said the company is "pleased to have the matter behind us."
Citigroup Global Markets, Lehman Brothers, JPMorgan Securities, Bank of America Securities LLC, Merrill Lynch & Co., and Arthur Andersen, were also named in the suit.
