AOL Time Warner faces yet another problem: one of its shareholders has filed a lawsuit alleging securities fraud.
Kenneth McClure is seeking undisclosed damages in the suit, filed at a federal court in Texarkana, Texas. He accuses AOL TW of inflating America Online’s advertising revenues, the level of which enticed investors to buy the media giant’s stock.
Named in the suit are AOL TW chairman Steve Case, chief financial officer Wayne Pace and AOL chief operating officer Michael Kelly.
McClure intends the lawsuit to be a class action, open to anyone buying AOL common stock after July 19, 1999, and anyone who owned shares converted into AOL TW stock between January 11, 2001, and July 17, 2002.
The troubled media mammoth insists it has done nothing wrong. “We haven’t seen the suit yet,” it declared, “but as we have said before, all of the company's accounting has been appropriate and in accordance with generally accepted accounting principles, and we have provided our investors with all appropriate material information about our business.”
Data sourced from: AdAge.com; additional content by WARC staff