Time Warner Agrees to $2.5 Billion Class Action Settlement
By Danielle Briones
Published on August 15, 2005
The terms of the agreement require Time Warner to pay about $2.4 billion of the settlement, while Ernst & Young will pay the remaining $100 million.
The settlement will compensate shareholders who bought shares of Time Warner or America Online between Jan. 27, 1999 and Aug. 27, 2002.
Time Warner has also agreed to settle two other lawsuits filed by the Securities and Exchange Commission and the Justice Department, in response to charges that AOL overstated advertising revenue and Internet subscriber numbers. The settlements totaled $300 million and $210 million respectively.
A spokesman for Time Warner says the company is working to address the securities fraud issues today in hopes of reducing costs and other problems in the future.
According to plaintiff attorneys, millions of shareholders will receive restitution.
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