MANHATTAN (CN) – Eight top executives of AOL/Time Warner fraudulently manipulated the company’s reported online advertising revenue, “a key measure by which investors and analysts evaluated the Company,” the SEC claims in two federal complaints.
“The Company fraudulently funded its own online advertising revenue by giving counterparties the means to pay for advertising they would not have otherwise purchased,” the SEC claims in one complaint. “As a result of the actions of senior business and financial managers and managers of the Company, including each of the defendants, the Company reported materially false and misleading financial results in periodic reports filed with the Commission and other public statements from at least October 2000 through the period ended May 2005.”
Charged in this complaint are David Colburn, 49, of Potomac, Md., former AOL executive vice president; Eric Keller, 43, of McLean, Va., former AOL senior vice president for business affairs; James MacGuidwin, 52, of McLean, former AOL controller and senior vice president of finance; and Jay Rappaport, 43, of Reston, Va., former AOL senior vice president for business affairs.
A second complaint accuses four other executives of overseeing similar frauds from 2000 through 2002. Charged in this complaint are former CFO John Michael Kelly, former senior manage Steven Rindner, former CFO Joseph Ripp, and former head of accounting policy Mark Wovsaniker.