Case, Parsons subpoenaed in SEC AOL probe

The U.S. Securities and Exchange Commission has subpoenaed Stephen Case, former chairman of AOL Time Warner, and Richard Parsons, current chairman and CEO, for questioning regarding the company’s accounting, according to a report published Wednesday.

The Securities and Exchange Commission has subpoenaed Stephen Case, former chairman of AOL Time Warner, and Richard Parsons, current chairman and CEO, for questioning regarding the company’s accounting, according to a report published Wednesday.

Case, Parsons and several other top executives have been subpoenaed as part of the SEC’s investigation into the way the company’s AOL Internet unit accounted for two advertising deals with Bertelsmann AG, the New York Times said in its online edition, citing sources involved in the investigation.

AOL Time Warner, which recently changed its name to Time Warner Inc., announced in March that the SEC was looking into its deals with Bertelsmann, as part of an ongoing investigation into the company’s accounting practices.

Separately Wednesday, Time Warner said in its third-quarter 2003 results that it has been informed by the Office of the Chief Accountant of the SEC that it incorrectly accounted for the Bertelsmann transactions, yet “based upon its knowledge and understanding of the facts” it continues to believe that the accounting was appropriate.

Time Warner added, however, that “restatement of the company’s financial statements with respect to these transactions may be necessary.”

In the results the company also confirmed that the SEC is continuing to investigate other transactions principally involving AOL, including advertising deals, and methods used by AOL to report subscriber numbers. Furthermore, Time Warner said that the Department of Justice is continuing its investigations into the Bertelsmann transactions and other transactions involving AOL third-party commercial partners.

Time Warner said that it may not have all relevant information related to the transactions and that it is not possible to predict what will come of the investigation but that it is fully cooperating with both the SEC and the Justice Department.

The New York company already restated nearly two-years worth of financial results last October after the SEC and the Justice Department launched investigations into accounting within the AOL unit.

U.K. spokesman for the company Jonathan Lambeth Wednesday said that he was unable to comment on the matter.

Scarlet Pruitt in London contributed to this report.