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5/19/2008
Former AOL Execs Charged By SEC on Billion Dollar Fraud
Former AOL Execs Charged By SEC on Billion Dollar Fraud
Four former AOLers have already settled with the SEC. Four more still have a date with a New York courthouse. And just think, some called this case dead only a year or so back... (See this article for more on that score and an interesting link to yesterday's PurchasePro store.
At issue are allegations that the eight executives participated in a scheme to fluff up AOL company value in the 2000 to 2002 period. AOL got caught at the time, essentially, paying themselves for their own advertising. This allowed AOL to pump up its online advertising revenue by about $1 billion.
Thus far David Colburn, former head of the AOL’s business affairs unit; Eric Keller, a former senior manager; James MacGuidwin, former controller; and Jay Rappaport, a former senior manager have all reached a settlement on the charges against them, without an admission of guilt.
Still on the chopping block are John Michael Kelly, former CEO; Steven Rindner, former senior executive; Joseph Ripp, former CFO of the company’s AOL division; and Mark Wovsaniker, former head of accounting policy.
AOL / Time Warner itself paid a $300 million settlement to the SEC back in '04-05 on a related case.
You can get details on the four and four cases, right here - straight from the SEC.
-- MDT
At issue are allegations that the eight executives participated in a scheme to fluff up AOL company value in the 2000 to 2002 period. AOL got caught at the time, essentially, paying themselves for their own advertising. This allowed AOL to pump up its online advertising revenue by about $1 billion.
Thus far David Colburn, former head of the AOL’s business affairs unit; Eric Keller, a former senior manager; James MacGuidwin, former controller; and Jay Rappaport, a former senior manager have all reached a settlement on the charges against them, without an admission of guilt.
Still on the chopping block are John Michael Kelly, former CEO; Steven Rindner, former senior executive; Joseph Ripp, former CFO of the company’s AOL division; and Mark Wovsaniker, former head of accounting policy.
AOL / Time Warner itself paid a $300 million settlement to the SEC back in '04-05 on a related case.
You can get details on the four and four cases, right here - straight from the SEC.
-- MDT
Labels: accounting fraud, AOL, Freelance Security, revenue inflation
"A person involved in the internal investigation said that in April 2001 Mr. Ripp noticed that Mr. Keller had tried to backdate a deal with the online advertising company PurchasePro so that it would add to first-quarter results."
Keller was then put on leave and the matter investigated. I don't understand how the man who brought the issue to the Justice Department is being charged.