Administration June 7, 2004

Ohio To AOL: You've Got Accounting Fraud Suit

July 18, 2003 (PLANSPONSOR.com) - The State of Ohio has announced plans to file a lawsuit against AOL Time Warner on behalf of its pension systems, alleging shady accounting prior to the mega merger cost the pensions mega dollars.
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Leading the charge will be the State Teachers Retirement System, which yesterday authorized Attorney General Jim Petro’s office to file the suit. A source confirmed that other pension funds would be represented in the suit, but estimates of pension losses due to plummeting values for AOL Time Warner stock were unavailable, according to news sources.

This is the latest in a series of actions taken by pension systems in the Buckeye State seeking to recoup investment losses in connection with Wall Street scandals.     Other suits have been filed in the scandals surrounding Enron, Global Crossing, and WorldCom (See  Ohio Will Stay Close to Home With Enron, WorldCom Claims).

Additionally, AOL Time Warner has been accused in a series of suits alleging accounting fraud and insider trading.     Earlier the University of California, following a similar path to recovering investment losses as the Ohio pensions, filed a lawsuit alleging AOL Time Warner executives made approximately $936 million through insider trading during the merger two years ago (See  Lawsuit Accuses AOL Time Warner Execs of Insider Trading ).

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