Saturday, May 31, 2008

Toothless SEC-4

"Six years after a scandal first erupted over AOL allegedly inflating its revenue during its merger with Time Warner Inc., U.S. regulators have concluded their investigation and filed civil-fraud charges against eight former executives. ... Four of the former executives, including Mr. [David] Colburn, who headed AOL's business-afffairs unit, have agreed to pay a combined sum of a little more than $8 million to settle the [SEC] suit filed Monday in U.S. District Court in Manhattan, The other four, including Mr. Kelly, are contesting the SEC charges, filed in a separate suit. ... At the heart of the SEC's inquiry was an alleged scheme in which AOL made so-called round-trip transactions to inflate revenue by giving vendors money to buy online advertising they didn't need. In 2005, the SEC sued Time Warner over related allegations. .. Time Warner settled the charges, paying a $300 million fine, and restated its earnings three times to correct its reported revenue. But the SEC continued its investigation. ... The four who have settled have agreed to pay fined and return allegedly ill-gotten gains, with interest. But they haven't admitted or denied wrongdoing under the settlement", my emphasis, WSJ, 20 May 2008.

Why did the SEC continue this farce to settle charges without an admission of wrongdoing? Does anyone in Cox's SEC have a lick of sense?


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