TW stock rises as SEC nears end of probe
NEW YORK — Time Warner shares popped Tuesday on word that it’s close to settling the long-running federal probe of AOL’s accounting practices before and after the Internet giant’s merger with Time Warner.But the $500 million that Time Warner recently set aside to pay for any fine may not be enough. According to a report in the Washington Post, TW may agree to pay as much as $750 million to end the investigation by the SEC and Justice Dept. A Time Warner spokesman declined to comment Tuesday, as did the SEC. The wide-ranging investigation is focused, among other things, on Time Warner’s accounting of its stake in AOL Europe before it bought out Bertelsmann in 2002. JPMorgan said it doubted that the fine would be as high as $750 million, which equals the record-breaking fine paid by WorldCom to the SEC. Investment bank said in a note that it didn’t believe “AOL’s accounting issues run as deep” as WorldCom’s. The probe, more than 2 years old, has cast a shadow over Time Warner’s stock, cramped its ability to pursue large acquisitions and distracted top management. As part of the settlement, conglom may not have to admit any wrongdoing, helping to shield it from shareholder lawsuits. Shares closed up 2.75% at $17.94 on the New York Stock Exchange.
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