The SEC is rumoured to be investigating an AOL Time Warner transaction with a UK based entertainment company where advertising was bought instead of an arbitration award being paid during a legal dispute. The commission is also investigating claims that AOL Time Warner switched revenues from one division to another and sold advertisements on behalf of eBay which were then accounted for as AOL’s own revenue.
AOL Time Warner has said that its accountants Ernst & Young signed off all the transactions being investigated by the SEC, as they believed that they all conformed to accepted accounting procedures.
