Washington Post: SEC seen readying AOL ad charges

Only a day after the story that AOL is winning back agency hearts and minds with a rebuilt and reinvigorated sales force, the Securities and Exchange Commission (SEC) let the other shoe drop, making public the "Wells notice" that signifies the formalization of an investigation into what the SEC believes was $400 million of improperly booked revenue through sham deals with Bertelsmann. The charges have been long rumored, and the notice signifies that the SEC believes it has enough evidence to recommend prosecution if Time Warner - AOL's parent - doesn't first settle.

Lump in snake indigestion or faked?

This set of revenues, and others like it, helped blow up the "Internet bubble" of several years ago, making the online ad revenues seem much larger than they actually were. The Internet Advertising Bureau's commonly accepted statistics were in part based on public disclosures now known to have been exaggerated by at least hundreds of millions of dollars. The IAB has not yet performed a correction on the longitudinal figures, which would show today's record spending levels to be all the more healthy, and might have helped clear up the confusion that obscured the beginning of today's online ad "recovery."