The U.S. Securities and Exchange Commission on Monday charged eight former executives of AOL Time Warner, now known as Time Warner Inc TWX.N, in a fraudulent scheme that overstated company advertising revenue by more than $1 billion.
Four of the defendants settled with the SEC and the other four are facing fraud-related charges in federal court in New York.
The former executives participated in a scheme from mid-2000 to mid-2002 to artificially inflate the company's reported online advertising revenue, the SEC said in a statement. Online advertising revenue was a key measure analysts and investors used to evaluate the company.
The scheme involved fraudulent transactions in which AOL Time Warner effectively funded its own advertising revenue by giving purchasers the money to buy online advertising that they did not want or need, the SEC said.