The Post said the SEC is planning to allege that AOL improperly booked nearly $400 million in ad revenue, and that the SEC will send a formal letter of notification to AOL's parent company, Time Warner, some time in early summer.
The Post report suggests the SEC must have gathered enough information about AOL's controversial ad deals to begin proceedings. The $400 million ad deal revolves around a negotiation between AOL and German media company Bertelsmann regarding AOL Europe. AOL Time Warner, as the company was then called, agreed to buy Bertelsmann's stake in AOL Europe, but reportedly bartered Bertelsmann part of the deal in advertising.
An SEC spokeswoman refused to comment on the news report, saying, "We do not discuss specific companies and we do not comment on newspaper reporters at all." The Department of Justice is also conducting a separate investigation.
The Washington Post quoted a government official familiar with the investigation as saying that Time Warner has not fully co-operated with the SEC.
A spokeswoman for Time Warner said: "We have been saying all along in this process that we intend to co-operate and make every effort to co-operate."
America Online acquired Time Warner in January 2000 for $163 billion. By September 2002, the AOL portion of the corporate name was dropped.