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Why Did Quest Communication Violate The Sarbanes Oxley Act Of 2002

573 Words3 Pages

In 2004, Securities and Exchange Commission charged Qwest Communications International Inc., one of the largest telecommunications companies in the United States, with securities fraud and other violations of the federal securities laws. Throughout the paper I will explain in details the fraudulent activities that Quest Communication International was charged with. What happened to the agents of the company and most important the shareholders. Finally, how did quest communication violate the Sarbanes Oxley Act of 2002? Qwest fraudulently recognized over $3.8 billion in revenue and excluded $231 million in expenses as part of fraudulent scheme to meet optimistic and unsupportable revenue and earnings projections. In addition to fraudulently …show more content…

The SEC filed a civil injunctive action against former Qwest officers Joel M. Arnold, William L. Eveleth, Grant Graham, Thomas W. Hall, Douglas K. Hutchins, Bryan K. Treadway, John M. Walker, and Richard L. Weston. In June 2004, the Commission instituted settled cease-and-desist proceedings and filed related civil actions for penalties against Augustine M. Cruciotti, a former Qwest executive vice president, and Steven L. Haggerty, a former Qwest senior vice …show more content…

The stakeholders that suffered the most were the thousands of investors who lost money when Qwest Communications International Inc.’s stock price plummeted from more than $60 a share in 2000 to just $2 a share in 2002. The scandal forced Qwest, a primary telephone service provider in 14 mostly Western states, to restate $2.2 billion in revenue.
Last but not least, Qwest Communications International violated all the areas of SOX 2002. Most of all Qwest lacked corporate governance which is significant in managing a big entity. Qwest was unable to disclose correct financial document, which was big red flag that were doing something illegally. The agents of the company (board of directors, auditors, CEO, CFO) were involved in the pansy scheme. Qwest Communication acted unethically. The agents of Qwest were selfish, greedy, and ruthless. They thought they were invincible and in control, but thanks to SEC they held accountable for their immoral

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