USA Today reported that the Justice Department began its investigation after The Washington Post said AOL had manipulated revenue leading to the close of its merger with Time Warner in January 2001.
After the story appeared in the Post, AOL said the SEC was "conducting an inquiry."
The 'current environment'
In a statement today,
A spokesman for the Justice Department said the agency would not comment at all on the published report.
AOL's stock was trading at $11.47 on the New York Stock Exchange, down 7.5% in mid-day trading.
Merrill Lynch & Co. analyst Jessica Reif Cohen continued to rate the stock neutral -- downgraded after last week's disclosure of the SEC probe -- but noted this latest inquiry will add even more volatility to the stock.
"We prefer to remain on the sidelines, given the uncertainty an investigation such as this creates," she said.