Feeds

SEC charges eight ex-AOL TW execs with civil fraud

Inflating ad revenues

Eight steps to building an HP BladeSystem

For two years, between 2000 and 2002, AOL execs cooked the books, bigtime.

They inflated revenues by more than $1bn, through artificial barter deals, by booking one-time gains as advertising income, and by booking the entire gross amount of advertising contracts instead of just the commission element. The Washington Post exposed the con in mid-2002. The US Securities and Exchange Commission (SEC) then went to work.

In 2005, Time Warner, AOL's parent company, got itself off the hook by paying the SEC $300m to settle securities fraud charges.

Now the SEC is gunning for the AOL Time Warner execs said to be involved in the advertising monkeyshines.

Today, it filed civil fraud charges against eight ex-execs. It has divided them into two groups of four: those it has let settle, and those it is pursuing through the court. Headed for a New York courtroom are John Kelly, former CFO of AOL Time Warner; Steven Rindner, a former exec in the company's business affairs Unit; Joseph Ripp, former CFO of the AOL division; and Mark Wovsaniker, former head of Accounting Policy.

According to the SEC, they "engineered, oversaw, and executed fraudulent round-trip transactions in which AOL Time Warner effectively funded its own advertising revenue by giving purchasers the money to buy online advertising that they did not want or need. Online advertising revenue was a key measure by which analysts and investors evaluated the company".

The four who have settled are all former employees in AOL's business affairs unit. They are not admitting or denying the SEC allegations, but they are collectively paying fines and penalties of more than $8m.

More at the SEC. ®

Mobile application security vulnerability report

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Amazon Reveals One Weird Trick: A Loss On Almost $20bn In Sales
Investors really hate it: Share price plunge as growth SLOWS in key AWS division
Bose says today is F*** With Dre Day: Beats sued in patent battle
Music gear giant seeks some of that sweet, sweet Apple pie
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
Twitch rich as Google flicks $1bn hitch switch, claims snitch
Gameplay streaming biz and search king refuse to deny fresh gobble rumors
prev story

Whitepapers

Top three mobile application threats
Prevent sensitive data leakage over insecure channels or stolen mobile devices.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.