AOL chief accused of insider trading

Steve Case and a group of AOL execs, including vice chairman Ted Turner, have been accused of raising more than $1.5bn from insider trading and dodgy deals.

A lawsuit has been brought against the group by two institutional investors who claim "tricks, contrivances and bogus transactions" were used to falsely inflate the company's shareprice, according to Reuters.

The two aggrieved parties, Amalgamated Bank's Longview Collective Investment Fund and The University of California, which claims to have lost $450m, have filed the lawsuit in a California Superior Court, claiming AOL overstated earnings for the 2000 to 2001 by around $1bn. The investors allege Case, Turner and co. then got rich selling shares at their artificially inflated peak.

AOL's accounting practices have already been brought into question, with the company agreeing, in the face of government investigations, to restate results for a two-year period, cutting revenue by $190m.

Whatever the outcome of the court case, corporate America will be watching developments closely as it strives to recover from the rash of accounting scandals which have plagued the business world for the past couple of years - resulting in landmark cases such as Enron and Worldcom.