Time Warner settles SEC fraud charges, pays $300 million penalty

Tuesday, March 22, 2005

NEW YORK -- Closing a difficult chapter, Time Warner Inc. said Monday it would pay $300 million and restate three years of financial results to settle civil fraud charges stemming from its accounting of online advertising revenues and subscriber counts at its AOL unit.

The settlement with the Securities and Exchange Commission also calls for the world's largest media company to open its books to an independent examiner, which could result in additional restatements.

The details of the deal, which include no admission or denial of wrongdoing, are in line with a proposal the company made and disclosed last December. At that time, Time Warner also said it had agreed to pay $210 million to resolve charges of criminal securities fraud in a separate investigation by the Department of Justice. The combined $510 million settlements should give Time Warner a freer hand to pursue acquisitions.

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