Shares in AOL Time Warner slumped today following news that the media group is to be investigated by the US securites and exchange commission.
Last week, The
Washington Post reported that AOL had boosted its revenue figures through unconventional deals between 2000 and 2002. It claimed that AOL had allowed a British entertainment company to buy advertising instead of paying an arbitration award in a legal dispute. Other allegations included improperly shifting revenue between divisions and selling advertising on the auction site, eBay and booking it as AOL income.
AOL’s chief executive, Richard Parsons denies the accusations but yesterday admitted that the SEC has launched a “fact finding inquiry” into the company’s accounts.
This development follows the resignation last week of Robert Pittman, one of the chief architects of AOL’s internet business (see COO Quits AOL Time Warner), which has struggled to attract revenue during the advertising recession.
