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SEC's Global Crossing Probe Spreads to Qwest

The Securities and Exchange Commission (SEC) continues to probe international voice and data carrier Global Crossing Ltd. over possible accounting improprieties, and it expanded the scope of its investigation Monday when it subpoenaed documents from Qwest Communications International .

Qwest Monday said the SEC requested the documents in connection with its investigation of Global Crossing and added that it intends to cooperate fully with the SEC.

Qwest's connection to the SEC's investigation is not clear, and Qwest could not immediately be reached for comment. However, the connection may be found in Qwest's successful bid to acquire regional Bell operating company U S West. In 1999, U S West agreed to be acquired by Global Crossing, but then received a rival offer from Qwest. U S West then backed out of its transaction with Global Crossing, invoking a clause in the deal under which U S West was required to buy 10 percent of Global Crossing's shares at a slight premium.

According to a report in The New York Times, Global Crossing founder Gary Winnick made out very well from the deal's collapse. The Times reported that Winnick held 100 million shares, options and warrants when the deal went under. He sold 5.6 percent of his stake to U S West at the company's offer price of $62.75 a share. Winnick netted $350 million in the transaction.