AOL stockholders reach settlement
A federal judge has approved Time Warner’s plan to pay $300 million to investors as part of a regulatory settlement following allegations that the conglom’s America Online unit overstated ad revenue and subscriber numbers.
Anyone who bought America Online stock from Sept. 22, 2000 through Jan. 11, 2001 will be eligible to receive a portion of the $300 million.
SEC plan was approved by Judge Gladys Kessler of the U.S. District Court for the District of Columbia. Individuals who bought stock in Time Warner, from January 11, 2001 through Aug. 27, 2002 also can participate.
America Online boosted advertising revenue by inflating the price it paid for goods and services in exchange for customers’ purchases of ads, the SEC said in a March 2005 complaint. America Online also overstated subscriber numbers by including corporate customers’ bulk memberships, even though most employees never became subscribers, the agency said.
Time Warner agreed to pay $300 million as part of the settlement without admitting or denying any wrongdoing.