Alaska Funds Join Time Warner/AOL Suit Parade

>Alaska Attorney General Gregg Renkes filed the latest suit in Juneau Superior Court, saying the Alaska Permanent Fund and other public investment pools were defrauded of a combined $70 million, the Anchorage Daily News reported.

>Even though a federal class action suit is pending in New York, Renkes said he decided to file his action in an Alaskan court seeking damages for violation of state law.   Renkes brought the 56-page suit on behalf of the Permanent Fund, which he said lost $50 million when the stock price fell, and other public funds, which collectively lost more than $20 million. Those funds include various state employee pension funds, the Alaska Mental Health Trust, the Exxon Valdez Oil Spill Trust, the University of Alaska endowment fund, the state Constitutional Budget Reserve, the Public School Trust Fund and the Alaska Children’s Trust Fund.

>Other states also have filed separate suits in local courts, including the California employee retirement system, the nation’s largest public pension fund. In late February, Pennsylvania sued to recover losses of more than $100 million. Other states to sue include Ohio, New Jersey, Minnesota and West Virginia.(See WV Enters AOL Accounting Fraud Fray ).

>As with the earlier lawsuits, Alaska accuses the companies of artificially boosting profits before and after their merger. Suspect accounting and other maneuvers were designed to mislead investors, the shareholder suits claim. Other defendants named in the suit include the accounting firm of Ernst & Young and several former AOL officers including Steve Case, who for years was the AOL corporate face for millions of Internet subscribers.

The U.S. Securities and Exchange Commission is probing possibly overstated advertising revenue, questionable accounting and insider trading at Time Warner and AOL..