Press Release: SEC Announces $316 Million Fair Fund Distribution to Investors Harmed by Fraud at Time Warner
Time Warner Inc. defrauded investors by inflating advertising revenue and AOL subscriber numbers and improperly consolidating AOL Europe’s finances, leading to a $300 million SEC penalty and a $316 million Fair Fund distribution to harmed investors in July 2007.
In March 2005, the SEC settled charges against Time Warner Inc. for accounting fraud involving the artificial inflation of advertising revenue and Internet subscriber numbers, as well as improper consolidation of AOL Europe, S.A.’s financial results. Time Warner paid a $300 million civil penalty, and with interest, the Fair Fund totaled approximately $316 million, which was distributed to injured investors in July 2007 after court approval. The distribution was separate from a parallel class action settlement and did not fund class action attorneys, ensuring all funds went directly to victims.
Time Warner Inc. engaged in widespread accounting fraud between 2000 and 2002 by artificially inflating its advertising revenue and AOL subscriber numbers, while also failing to properly consolidate the financial results of its subsidiary, AOL Europe, S.A., leading to misleading financial disclosures. In March 2005, the SEC reached a settlement with Time Warner, imposing a $300 million civil penalty as part of the resolution. The resulting Fair Fund, which grew to approximately $316 million with accrued interest, was approved for distribution by the U.S. District Court for the District of Columbia in June 2007 and completed in July 2007. This distribution was coordinated with, but entirely separate from, a parallel class action settlement, and no Fair Fund money was used to pay class action counsel. The SEC emphasized that this payout was part of its broader effort since the 2002 passage of the Sarbanes-Oxley Act to return over $2 billion to injured investors. The distribution was administered by Gilardi & Co. LLC, with information available via a dedicated website and toll-free number. This case underscored the SEC’s commitment to holding corporations accountable and ensuring restitution to defrauded shareholders.
Extracted insights
- $2.00B $2 Billion ≥$1B
- $2.00B $2 billion ≥$1B
- $316.00M $316 Million $100M–$1B
- $316.00M $316 million $100M–$1B
- $300.00M $300 million $100M–$1B
- agency director of sec's division of enforcement
- company fair fund
- company fair fund created as part of settlement with time warner inc.
- person linda chatman thomsen
- agency sec's proposed distribution plan on july 11, 2006
- agency Securities and Exchange Commission
- company time warner inc.
- court united states district court for the district of columbia
- SEC announced $316 Million Fair Fund Distribution to Investors Harmed by Fraud at Time Warner
- SEC distributed over $2 billion in Fair Fund monies since 2002
- SEC brought settled action against Time Warner Inc.
- Time Warner Inc. engaged in fraud and accounting improprieties by artificially inflating advertising revenue and Internet subscriber numbers
- Time Warner Inc. failed to properly consolidate financial results of AOL Europe, S.A.
- Time Warner Inc. paid $300 million civil penalty
- Fair Fund available for distribution approximately $316 million including interest
- United States District Court for the District of Columbia approved SEC's proposed distribution plan on July 11, 2006
- SEC commenced distribution Fair Fund created as part of settlement with Time Warner Inc.
- Linda Chatman Thomsen is Director of SEC's Division of Enforcement
- SEC brought action against Time Warner in March 2005
- Final court approval for distribution given on June 20, 2007
SEC Announces $316 Million Fair Fund Distribution to Investors Harmed by Fraud at Time Warner Distribution Marks the Commission's Distribution of More Than $2 Billion of Fair Fund Monies to Injured Investors FOR IMMEDIATE RELEASE 2007-131 Washington, D.C., July 9, 2007 - The Securities and Exchange Commission today announced that it commenced the distribution of the Fair Fund created as part of a settlement with Time Warner Inc. on charges of improper financial reporting and disclosure. The distribution is expected to be completed in approximately ten days. "With this distribution, the Commission will have distributed over $2 billion in Fair Fund monies since the 2002 passage of the Sarbanes-Oxley Act, demonstrating our continued resolve to return money to injured investors where appropriate," said Linda Chatman Thomsen, Director of the SEC's Division of Enforcement. The Commission brought a settled action against Time Warner in March 2005 alleging that Time Warner engaged in fraud and other accounting improprieties by artificially inflating its advertising revenue and Internet subscriber numbers, and by failing to properly consolidate the financial results of one of its subsidiaries, AOL Europe, S.A. Time Warner paid a $300 million civil penalty as part of the resolution of these claims. Including interest, the Fair Fund available for distribution is approximately $316 million. On July 11, 2006, the United States District Court for the District of Columbia approved the Commission's proposed distribution plan. The distribution of the Fair Fund, which is being made on the same timetable as the class action distribution in a pending case against Time Warner and other defendants, is in addition to the class action settlement. None of the Fair Fund is being used to pay class action counsel. Final court approval for distribution was given on June 20, 2007. More information is available at www.aoltimewarnersettlement.com. Questions regarding the distribution should be directed to the distribution agent: Call toll-free: 1-877-800-7852 Visit the settlement website: www.aoltimewarnersettlement.com Write to: Gilardi & Co. LLC P.O. Box 808003 Petaluma, CA 94975-8003 # # # http://www.sec.gov/news/press/2007/2007-131.htm Home | Previous Page Modified: 07/09/2007
SEC Announces $316 Million Fair Fund Distribution to Investors Harmed by Fraud at Time Warner Distribution Marks the Commission's Distribution of More Than $2 Billion of Fair Fund Monies to Injured Investors FOR IMMEDIATE RELEASE 2007-131 Washington, D.C., July 9, 2007 - The Securities and Exchange Commission today announced that it commenced the distribution of the Fair Fund created as part of a settlement with Time Warner Inc. on charges of improper financial reporting and disclosure. The distribution is expected to be completed in approximately ten days. "With this distribution, the Commission will have distributed over $2 billion in Fair Fund monies since the 2002 passage of the Sarbanes-Oxley Act, demonstrating our continued resolve to return money to injured investors where appropriate," said Linda Chatman Thomsen, Director of the SEC's Division of Enforcement. The Commission brought a settled action against Time Warner in March 2005 alleging that Time Warner engaged in fraud and other accounting improprieties by artificially inflating its advertising revenue and Internet subscriber numbers, and by failing to properly consolidate the financial results of one of its subsidiaries, AOL Europe, S.A. Time Warner paid a $300 million civil penalty as part of the resolution of these claims. Including interest, the Fair Fund available for distribution is approximately $316 million. On July 11, 2006, the United States District Court for the District of Columbia approved the Commission's proposed distribution plan. The distribution of the Fair Fund, which is being made on the same timetable as the class action distribution in a pending case against Time Warner and other defendants, is in addition to the class action settlement. None of the Fair Fund is being used to pay class action counsel. Final court approval for distribution was given on June 20, 2007. More information is available at www.aoltimewarnersettlement.com. Questions regarding the distribution should be directed to the distribution agent: Call toll-free: 1-877-800-7852 Visit the settlement website: www.aoltimewarnersettlement.com Write to: Gilardi & Co. LLC P.O. Box 808003 Petaluma, CA 94975-8003 # # # http://www.sec.gov/news/press/2007/2007-131.htm Home | Previous Page Modified: 07/09/2007