The lawsuits filed in the US District Court in Lower Manhattan by the Securities and Exchange Commission (SEC) charge that eight former executives of AOL inflated online advertising revenue by not less than $1 billion.

The actions by the accused had the effect of making investors and Wall Street analysts feel that AOL Time Warner was a ‘stronger, healthier firm than it really was, it has been charged. Associate director in the SEC’s division of enforcement Scott W. Friestad stated:

The conduct occurred at a time when the Internet bubble was about to deflate.

Four of the defendants in the case settled the charges without admitting any wrongdoing, while four are contesting them. Mr. Rappaport will pay about $750,000, whereas Mr. Keller will pay close to $1 million to settle the charges.

Mr. MacGuidwin will be paying $2.4 million to settle the charges. Mr. Colburn will give away almost $4 million. Both were barred from serving as directors in public firms for 10 and 7 years, respectively. The four contesting the charges are Joseph A. Ripp, former chief financial officer of the AOL division; John Michael Kelly, the former chief financial officer of AOL Time Warner, Mark Wovsaniker, the former head of accounting policy and Steven E. Rindner, a former AOL business affairs executive.