Feeds

SEC charges eight ex-AOL TW execs with civil fraud

Inflating ad revenues

Security for virtualized datacentres

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. ®

Security for virtualized datacentres

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Apple CEO Tim Cook: TV is TERRIBLE and stuck in the 1970s
The iKing thinks telly is far too fiddly and ugly – basically, iTunes
Huawei ditches new Windows Phone mobe plans, blames poor sales
Giganto mobe firm slams door shut on Microsoft. OH DEAR
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Found inside ISIS terror chap's laptop: CELINE DION tunes
REPORT: Stash of terrorist material found in Syria Dell box
Show us your Five-Eyes SECRETS says Privacy International
Refusal to disclose GCHQ canteen menus and prices triggers Euro Human Rights Court action
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.