Former Qwest SVP Pleads Guilty
Former Qwest Communications International Inc. (NYSE: Q) executive Marc Weisberg has plead guilty to one charge of wire fraud, defraying a trial that was due to start this week.
Eleven other charges against Weisberg were dropped in the plea bargain dated today. Prosecutors are asking for a sentence of two years probation following a six-month home detention, plus a $250,000 fine.
Weisberg was one of many executives accused of improperly taking stock from startups that hoped to sell to Qwest. His guilty plea involves dealings with CoSine Communications Inc. Qwest helped CoSine develop and test a system that the company eventually bought; along the way, CoSine gave pre-IPO "friends and family" shares to Weisberg and other Qwest execs. (See Sources: Qwest Case Broadening.)
Weisberg sold the stock in 2001 for a $529,000 loss, according to his plea.
It's possible Weisberg will be asked to testify in the trial of former Qwest CEO Joseph Nacchio, who was indicted Dec. 20 on 42 counts of insider trading related to $101 million in stock sales in 2001. Former CFO Robin Szeliga and former president Afshin Mohebbi also could be called upon to testify. (See Prosecutors Pounce on Nacchio .)
CoSine, which developed IP services equipment, fell off the map as the telecom downturn worsened. Tut Systems Inc. (Nasdaq: TUTS) appeared ready to acquire the company early this year, but the deal fell through. As of July, CoSine was thinking it might do some acquiring of its own. (See Tut's CoSine Deal Drags On, CoSine: 'Come & Get Us', and CoSine Seeks New Blood.)
— Craig Matsumoto, Senior Editor, Light Reading