Pension losses prompt Ohio to sue AOL

7/18/2003

COLUMBUS - The state plans to file a lawsuit today against AOL Time Warner on behalf of its pension systems, arguing that AOL's questionable accounting prior to the merger of the two communications giants led to investment losses.

The State Teachers Retirement System yesterday authorized Attorney General Jim Petro's office to file the suit. Board Chairman Deborah Scott said the state faced a deadline of today for filing the suit.

A source confirmed that other pension funds would be represented in the suit, but estimates of pension losses due to plummeting values for AOL Time Warner stock were unavailable last night.

The company has been accused in a series of suits alleging accounting fraud and insider trading. The company's value has dropped dramatically since the merger as the once-dominant AOL struggles to hold onto customers switching from dial-up Internet service to faster broadband.

The suit is just the latest action taken by Ohio pension systems in connection with a series of Wall Street scandals involving the accounting practices of Enron, Global Crossing, and WorldCom.