Time Warner, Ernst to Settle Fraud Suit

Time Warner Inc., its AOL subsidiary and auditor Ernst & Young have agreed to pay $23 million to settle a lawsuit accusing them of defrauding a Pennsylvania pension fund for teachers and state workers.

The suit, filed in February 2004, claimed that the companies overstated revenue and subscriber figures after the merger of New York-based Time Warner and America Online Inc., based in Dulles, Va., was announced in 2000, Pennsylvania Atty. Gen. Tom Corbett said.

The Pennsylvania case was among a group of suits filed by more than 100 pension funds and other investors.