SEC probes AOL Time Warner deals

NEW YORK, July 24 (UPI) -- AOL Time Warner Inc., the world's largest media firm, revealed Wednesday it was the subject of a "fact-finding" investigation by the Securities and Exchange Commission into a series of deals that boosted its revenues.

"After the articles (in the Washington Post) came out (last week), the SEC informed us that they are conducting a fact-finding inquiry," Chief Executive Richard Parsons said in a conference call with investors.

Company shares were off 75 cents, or 6.6 percent, to $10.52 in after-hours trading.

The Post reported on the transactions last week. It examined a number of the company's online division's advertising and commerce deals that added up to $270 million between July 2000 and March 2002.

Parsons did not elaborate, but said the company was cooperating with the SEC. The SEC did not comment.

News of the SEC investigation overshadowed the world's biggest media company's first-ever profit since its merger.

AOL Time Warner's net earnings were $394 million or 9 cents a share, compared with a net loss of $734 million or 17 cents a share last year. Revenues were $10.58 billion compared with $9.3 billion last year.

Last week, company Chief Operating Officer Robert Pittman resigned and the firm announced a corporate restructuring plan, making its online division a part of the unit that includes Time Inc., Time Warner Cable and the AOL Time Warner Book Group.