Former Top AOL Officers Charged With Fraud

The SEC announced Monday that it has filed fraud charges against eight former AOL executives for allegedly inflating the company's advertising revenue by more than $1 billion prior to the 2000 merger with Time Warner. Among those named in the complaint is John Michael Kelly, the company's chief financial officer, who went on to hold the same position at the merged AOL Time Warner (the company dropped AOL from its name in 2003). The SEC said that at the time the merger was being considered, AOL, like the rest of the dot-com business, was facing a financial crisis. To counteract the downturn, the SEC said, AOL engaged in what it called "round-trip" transactions, in which it took the money it received from advertisers and essentially gave it back to them to buy additional advertising that they "did not need or want."

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