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Time Warner, SEC Settle AOL Fraud Charges

The company is pursuing a joint bid with cable giant Comcast Corp. for the holdings of another cable concern, Adelphia Communications Corp.

As part of the SEC settlement, Time Warner agreed to open its books to an independent examiner, who will review the company's accounting practices for deals it brokered with 17 other companies from June 2000 to December 2001. Further restatements may be needed after the examiner's review, Time Warner said in a recent securities filing.

_____Background_____
Time Warner Settles AOL Cases For $510 Million (The Washington Post, Dec 16, 2004)
_____AOL Series_____
Part I: Unconventional Transactions Boosted Sales (July 18, 2002)
Part II: Creative Transactions Earned Team Rewards (July 19, 2002)
Sidebar: Unorthodox Partnership Produced Financial Gains (July 19, 2002)
_____On the Web_____
SEC Announcement
Time Warner Press Release
_____Post 200 Profile_____
Time Warner Inc.
_____Time Warner News_____
Ex-AOL Executive Guilty Of Fraud (The Washington Post, Apr 8, 2005)
AOL to Introduce Internet Phone Service (The Washington Post, Apr 7, 2005)
Case Seeks Health Care Revolution (The Washington Post, Apr 5, 2005)
More AOL Time Warner News
_____Time Warner_____
Stock Quote and News
Historical Chart
Company Description
Analyst Ratings
Timeline: Time Warner Highlights
Company Downsizing Actions
_____Interactive Primer_____
Understanding Regulatory Policy
_____Related SEC Articles_____
Kerkorian's Claim Rejected (The Washington Post, Apr 8, 2005)
Court Order Protects Documents In AIG Case (The Washington Post, Apr 8, 2005)
Insurance Product Can Disguise a Loan (The Washington Post, Apr 1, 2005)
More SEC News

The company said it would not be able to deduct the $300 million civil fine for tax purposes or to cover settlements of related shareholder lawsuits. Time Warner faces 30 ongoing class-action lawsuits, according to an annual report it filed last week with the SEC.

Time Warner had outlined the terms of the SEC settlement in December, when it resolved a related criminal case filed by the Justice Department by agreeing to pay $60 million in penalties and $150 million to create a fund for shareholders. Time Warner could be subject to criminal prosecution if it violates the terms of the Justice Department deal in the future.

Securities regulators and federal prosecutors in Northern Virginia said they continue to probe individuals who may have taken part in the fraud.

James T. Coffman, an assistant SEC enforcement director, said in a written statement that investigators will turn their attention "to those primarily responsible for the company's fraud and improper reporting."

In January, the U.S. attorney for the Eastern District of Virginia, Paul J. McNulty, indicted two former AOL officials and four executives at PurchasePro, a Las Vegas software company. Several other former AOL employees remain under scrutiny.

Time Warner stock closed at $18.42 yesterday, down 28 cents, or 1.5 percent.


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