David Colburn, former head of AOL's business unit, will pay $2m and be barred for seven years; while two business affairs executives Eric Keller

Eight former executives of the unhappy dotcom merger between AOL and Time Warner have been charged with fraud for inflating the firm's online advertising revenues by more than $1bn (£509m).US financial regulator the Securities and Exchange Commission has filed civil lawsuits alleging that between 2000 and 2002 the eight men had produced or contributed to financial statements that inflated advertising results.<br />At the time, Time Warner had just been bought by AOL for $164.7bn and the newly merged firm was under pressure to prove its financial viability.<br />The SEC, which began investigating the firm in 2002, also claims that AOL Time Warner used various "elaborate accounting schemes" to boost online ad revenue figures.These included so-called "round trip" transactions, where the firm bought extra adverts for clients including Sun Microsystems and Hewlett-Packard to try to boost figures further.The lawsuits claim that the AOL Time Warner executives "knowingly or recklessly engineered, oversaw and executed a scheme to artificially and materially inflate the company's reported online advertising revenue".<br />Former AOL controller James MacGuiwin is one of four defendants to have settled the charges without admitting any wrongdoing. He will pay $4m and be banned from serving as a company director for 10 years.<br />David Colburn, former head of AOL's business unit, will pay $2m and be barred for seven years; while two business affairs executives Eric Keller and Jay Rappaport will pay up to $1m each.The charges are contested by the remaining four defendants: former chief financial officer John Micheal Kelly, AOL's ex-chief financial officer Joseph Ripp, ex-head of accounting policy Mark Wovsaniker and senior executive Steven Rindner.They are facing SEC charges that the regulator claims are supported by emails and evidence including a note from Kelly to Wovsaniker in which he asks what "other round trips do you have coming down the line?".A lawyer for Kelly said he "flatly denies the SEC's claims and will vigorously defend himself in the courts".AOL Time Warner has already paid a $300m fine as a result of the SEC's civil fraud charges and $210m from a criminal securities fraud investigation by the US Justice Department, but did not admit any fault.

David Colburn, former head of AOL's business unit, will pay $2m and be barred for seven years; while two business affairs executives Eric Keller

Eight former executives of the unhappy dotcom merger between AOL and Time Warner have been charged with fraud for inflating the firm's o...

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