Fraud scandal in AOL Time Warner continues Zuzana Zelenakova

You may not know it but Time Warner, Inc. is the largest media and entertainment company in the world. Based in New York City the company is involved in film, television, publishing, Internet service and telecommunications. The list of its subsidiaries is quite impressive. For example AOL, New Line Cinema (standing behind the hit Lord of the Rings film trilogy), HBO, CNN, Cartoon Network, DC Comics, Warner Bros. Entertainment and so on. AOL also based in New York City is global Internet services and media company. The company once dubbed “the goliath among Internet service providers” had more than 30 million subscribers around the world. It merged with Time Warner in 2001. Now the company is facing a scandal as eight former executives were accused of inflating AOL´s ad revenues by unbelievable billion dollars in the period from 2000 to 2002. On Monday, the US Securities and Exchange Commission claimed that the executives participated in actions where the company gave advertisers money to buy ads they did not want or need. The inflated revenues subsequently resulted in the rise of the stock price, which enabled the company to buy Time Warner in 2001 for 184 billion dollars in 2001 and thus create the world´s media superpower. “When you summarise it, it´s a story of trying to create the appearance of success in business that´s just not there,” said US Attorney Paul McNulty to reporters back in 2005. Four of the accused men, David Colburn, Eric Keller, Jay Rappaport and James MacGuidwin, agreed to settle the lawsuits by paying 8 million dollars fine. In 2004 and 2005 Time Warner assented to pay 300 million dollars in order to resolve the civil lawsuits with the SEC and another 210 million dollars in case of charges by the US Justice Department.

related story: http://news.yahoo.com/s/ap/20080519/ap_on_hi_te/aol_executives_fraud_charges;_ylt=Aku3ap1MF7QqCdh9lLbfVLes0NUE

by Zuzana Zelenakova for PocketNews (http://pocketnews.tv)

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