EX-QWEST CHIEF WILL RETURN $4.4M IPO BONANZAMay 14, 2003 | New YorkPost Former Qwest chairman Philip Anschutz forged an agreement with New York Attorney General Eliot Spitzer yesterday to fork over $4.4 million in profits reaped from hot IPO deals doled out by Citigroup's Salomon Smith Barney.
The Post reported the deal Monday.
According to the terms of the agreement, Anschutz will donate the $4.4 million to charity. About $1.2 million will be used to fund securities arbitration clinics at six New York law schools.
Spitzer sued five telecom execs in late September, demanding repayment of money they got from the hot IPO shares acquired in return for giving Citigroup their investment banking business.
Charges against the other four executives former WorldCom CEO Bernie Ebbers; Metromedia Fiber Networks Chairman Stephen A. Garofalo; former McLeod USA CEO Clark E. McLeod and former Qwest CEO Joseph P. Nacchio remain outstanding and their cases are ongoing. Those charges are considered more serious because the officers directly solicited hot IPO shares from the banks; Anschutz was seen as simply having benefited from access to the offering.
The recent $1.4 billion global research settlement bans the practice of "spinning," or doling out high-demand IPO shares in exchange for business.
"Even though IPO spinning has been banned under the recent Wall Street accord, we continue to pursue appropriate remedies against individuals who were enriched unjustly by the practices revealed in the course of our investigation," Spitzer said.