Federal regulators are close to accusing Time Warner Inc. of faulty accounting for $400 million in revenue it booked in 2001, a newspaper reported Tuesday.
The company declined to comment on the report in The Washington Post and said only that it was continuing its efforts to cooperate with the investigations by the Securities and Exchange Commission and the Department of Justice.
Regulators have been investigating Time Warner’s accounting for two years, including a $400 million advertisement deal with the German media conglomerate Bertelsmann. The investigations are still under way, and authorities have yet to announce a conclusion.
The company has previously disclosed in regulatory filings that it disagrees with the judgment of the SEC that its accounting of the $400 million Bertelsmann ad deal was wrong and has said it might be required to make further restatements. Time Warner already restated $190 million in revenue in 2002 because of incorrect accounting at its online division.
The Washington Post, quoting unidentified people familiar with the situation, reported in its Tuesday editions that the SEC plans to send a formal notification, called a Wells notice, to Time Warner by early summer with allegations of wrongdoing. After that, the company and regulators would begin talks to negotiate a settlement.
In Washington, SEC spokesman Matt Well declined comment.
Time Warner’s shares were off 47 cents to close at $16.90 on the New York Stock Exchange on Tuesday.
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