US federal authorities are investigating allegations that America Online (AOL) executives carried out a series of deals which improperly boosted the company's revenue figures.
According to The Washington Post, the Securities and Exchange Commission (SEC) is investigating whether AOL executives David Colburn and Eric Keller misled accountants about a series of deals involving a real estate listing company called Homestore.
Homestore executives allegedly told federal law enforcement officers that, Colburn and Keller, who held powerful positions in AOL's business affairs unit, concealed the complex nature of the transactions to boost revenue.
They claim that Homestore would pay firms for a service or product it had no use for, then persuade the same firms to buy a similar amount of advertising on AOL. AOL would then share the ad revenue with Homestore.
These 'triangular' deals enabled AOL to meet its internal financial targets and Homestore to meet its quarterly financial expectations.
Neither Colburn nor Keller would make any comment to The Washington Post on the story.
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