PracticeAccounting FirmsE&Y named in multimillon dollar AOL lawsuit

E&Y named in multimillon dollar AOL lawsuit

Big Four firm Ernst & Young, auditor to embattled media giant AOL Time Warner, has been named in a lawsuit filed against the company by institutional investors.

Link: AOL accounting troubles deepen

The lawsuit, filed by shareholders’ law firm Milberg Weiss accuses the company of ‘tricks, contrivances and bogus contractions’ to inflate AOL’s share price.

It alleges that senior executives, including its former chairman Steve Case, benefited from insider trading when AOL merged with Time Warner in January 2001.

Past and present executives ‘are accused of carrying out a scheme to overstate the number of the company’s internet subscribers and inflate its e-commerce advertising revenues, profits and backlog of future business to help secure a merger with Time Warner,’ a statement by Milberg Weiss read.

The plaintiffs argue they lost around $500m because of the alleged deception.

E&Y was auditor of both companies before the merger, but has denied any wrongdoing and stands by its work, according to reports, while the company said it would defend itself vigorously against all allegations.

Last month, AOL officials continued to insist they were cooperating with the SEC, after already reporting accounting problems totalling $190m and handing over thousands of pages of documents to the regulator.

Related Articles

Sexual harassment – is accountancy next for #MeToo?

Accounting Firms Sexual harassment – is accountancy next for #MeToo?

11h Karen Baxter, Lewis Silkin
Johnston Carmichael CEO appointed as ICAS president

Accounting Firms Johnston Carmichael CEO appointed as ICAS president

3w Emma Smith, Managing Editor
British Accountancy Awards 2018 – entries open!

Accounting Firms British Accountancy Awards 2018 – entries open!

1m Emma Smith, Managing Editor
Is the accountancy sector facing an international talent crisis?

Accounting Firms Is the accountancy sector facing an international talent crisis?

1m Lewis Silkin
RSM appoints new Chief Operating Officer

Accounting Firms RSM appoints new Chief Operating Officer

1m Alia Shoaib, Reporter
RSM announces 11 partner promotions

Accounting Firms RSM announces 11 partner promotions

2m Emma Smith, Managing Editor
BDO hires former AstraZeneca creative director as head of digital and innovation

Accounting Firms BDO hires former AstraZeneca creative director as head of digital and innovation

2m Emma Smith, Managing Editor
What does the future hold for listed accountancy firms?

Accounting Firms What does the future hold for listed accountancy firms?

2m Fergus Payne, Lewis Silkin