AOL Time Warner faces class action lawsuit from shareholders
NEW YORK - AOL Time Warner, the world's biggest media company, is the latest company to face a class action lawsuit from shareholders over accountancy practices.
AOL Time Warner is being sued for making misrepresentations regarding its online advertising revenues, which artificially inflated its income.
The suit has been filed in Texarkana, Texas by the law firm Patton, Haltom, Roberts, McWilliams & Greer. It covers shareholders who invested in either America Online or in AOL Time Warner stock between July 19, 1999 and July 17, 2002. It names AOL Time Warner and "certain of its officers and directors" as the defendants.
It has been alleged that AOL Time Warner broke federal securities laws over the way it booked online advertising revenue. It was reported that the company sold ads in lieu of taking a cash settlement from a company it was involved in a lawsuit with, and there are also questions over ads sold on behalf of eBay.
AOL Time Warner is now being investigated by the US Justice Department.
Omnicom, the world's third-largest advertising company, is also facing a host of class action lawsuits -- over a dozen at last count -- over allegations it misled investors.
However, today's announcement about AOL did not seem to have an adverse affect on its already-battered share price. Shares closed up by 39 cents, or 3.61% last night to trade at $11.19, after an all-round market rally.
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