AOL Time Warner Hit With Shareholder Suit

Shareholders filed a securities fraud suit against AOL Time Warner Inc., alleging the world’s largest media company artificially inflated online advertising revenue.

Kenneth McClure, who held 10,680 shares of AOL Time Warner, is the lead shareholder in a suit seeking an unspecified amount in damages for the alleged securities fraud and the subsequent fall of AOL Time Warner shares. Shares fell about 70% this year amid concerns about growth prospects and disappointment over unfulfilled promises made when AOL completed its $106.2-billion purchase of Time Warner in 2001.

Shares of AOL Time Warner were up 90 cents to $10.80 on the New York Stock Exchange.

AOL Time Warner, which has been reshuffling its top ranks in an attempt to regain focus and credibility, said it has not seen the lawsuit filed in Texarkana, Texas, but maintained that it properly accounted for advertising revenue.