NEW YORK (CNN/Money) - The Securities and Exchange Commission is taking a tough stance in its investigation of whether Qwest Communications Inc. properly reported about $1.4 billion in sales of fiber-optic capacity, a newspaper reported Wednesday.

Qwest has said it is trying to convince the SEC that the company accounted for the nearly 4 percent of their income in the proper manner, according to the Wall Street Journal.

The reporting of certain transactions, including "swapping" fiber-optic capacity with companies such as Global Crossing, are under scrutiny by the SEC. The federal commission is investigating whether Qwest reported the revenue from such deals all once, rather than over time, and if this method was appropriate, the report said.

A Qwest spokesman told the Journal that he was unaware of any new issues that may have arisen since the SEC began their investigation in March, the report said.

Several top current and former Qwest executives, including former CEO Joseph Nacchio who resigned last week and the company's president and chief financial officer have testified in front of the SEC in its Denver office, people close to the situation have said, according to the report.

If Qwest is forced to restate its revenue, it could be subject to lawsuits from shareholders who lost money due to the allegations and the company could be in violation of some debt covenants, the report said.

The SEC declined comment to the Journal on the investigation, the report said.

Qwest (Q: Research, Estimates) shares, which have fallen 85 percent in the past year, dipped 23 cents to $4.19 in Tuesday trading. The European shares lost 20 percent in Wednesday trading.