The
state of Alaska has settled a securities fraud
case for $50 million against America Online, Inc.,
Time Warner Inc. and Historic TW Inc. The state
filed the lawsuit in 2004 in Juneau Superior Court,
claiming that the companies misrepresented advertising
revenues and growth of AOL and AOLTW, along with
the number of AOL subscribers.
The
state claimed the effect was to artificially inflate
the stock price of AOL and AOLTW to the detriment
of Alaska state investment funds. Under the terms
of the settlement, Time Warner did not admit liability
or wrongdoing. The lawsuit was filed on behalf of
the Alaska Department of Revenue, the Alaska State
Pension Investment Board and the Alaska Permanent
Fund Corporation. The Alaska funds that invested
in AOL, Time Warner, and Historic TW stock include
the permanent fund and state pension funds.
Alaska
officials estimated losses of $70 million when they
filed the lawsuit, said Department of Law spokesman
Mark Morones. The Alaska Department of Law retained
the law firm of Lieff Cabraser Heimann & Bernstein,
LLP, to lead the litigation efforts.
Alaska's
new Revenue commissioner, Patrick Galvin, said protecting
Alaska's financial assets is a key priority for the
state. "The corporate scandals on Wall Street
in the past several few years required us to seek
recovery of the millions of dollars the state of
Alaska lost from its investment portfolios," Galvin
said. "Today's settlement represents a substantial
recovery of those losses." |
