Ohio suit claims firm deceived investors
7/19/2003COLUMBUS - The state yesterday sued media giant AOL Time Warner in an attempt to recover at least $100 million that Ohio's five pension systems lost in stock investments.
The lawsuit filed by Attorney General Jim Petro accuses America Online and Time Warner of misleading investors about their merger by filing “erronous and falsified documents.”
“AOL's corrupt accounting practices, contracting e-commerce advertising, and shrinking subscriber base badly damaged [AOL Time Warner], result in huge damage to former Time Warner shareholders, as well as investors in the new enterprise,” the lawsuit filed in Franklin County Common Pleas Court claims.
Mr. Petro said the five state pensions systems owned Time Warner stock at the time of the merger in 2001 and received 3 million AOL Time Warner shares. The pension systems later bought 2 million shares. The value of the stock dropped from $49 per share at the time of the merger to below $10.
Mr. Petro said the losses were “even beyond what normal market forces would have brought to bear.”
Mr. Petro said the lawsuit also seeks to recover investment losses suffered by the Bureau of Workers' Compensation. Besides the compensation bureau, the plaintiffs are the Ohio Public Employees Retirement System, the State Teachers Retirement System of Ohio, the School Employees Retirement System of Ohio, the Ohio Police and Fire Pension Fund, and the Ohio State Highway Patrol Retirement System.