Ex-AOL finance chief settles SEC suit

Former AOL chief financial officer John Michael Kelly has agreed to pay $260,000 to settle an SEC complaint alleging that he oversaw a scheme to artificially inflate the company’s revenue, the agency said Thursday.

Under the court-approved settlement, Kelly neither admitted nor denied wrongdoing.

The case is related to AOL’s disastrous merger a decade ago with Time Warner.

While the merger was pending, AOL faced a crisis as the market for online advertising began shrinking, and the company used accounting subterfuges to prop up its revenue, the SEC said in a 2008 civil complaint.

Kelly “knew or was reckless in not knowing that AOL was improperly recognizing revenues from sham transactions that he had approved,” the SEC alleged. Kelly negotiated two transactions with a German firm that resulted in $400 million being improperly booked as advertising revenue, the SEC alleged.

Comments
Show Comments
Most Read Business

business

economy

Success! Check your inbox for details.

See all newsletters