The US Securities and Exchange Commission (SEC) is investigating whether America Online (AOL) illegally boosted revenues from advertising by more than its parent company has disclosed, the Washington Postreported this morning.
The paper said the SEC was studying deals, including a $100 million transaction between AOL, the Internet unit of media conglomerate AOL Time Warner, and online job search firm Monster.com.
Investigators are investigating whether the transaction was actually a profitless "round-trip" deal in which the companies agreed to promote each other through ads on their respective websites, the report said.
A spokesman for AOL was not immediately available for comment early today.
Separately, the New York Timesreported that the SEC was investigating a two-year-old agreement that AOL Time Warner made to sell $25 million in advertising to Vivendi Universal as part of a deal for its stake in AOL France.
The report, citing executives briefed on the investigation, said securities regulators were looking into potential accounting fraud.