SEC Reportedly Wants Data on AOL Bulk Subscriber Program

The government reportedly is seeking documents from AOL Time Warner(AOL) concerning the bulk-subscription program at its America Online unit.

The company's legal department sent an email asking employees not to destroy documents related to the shadowy program, which has recently emerged as a big contributor to America Online's closely watched subscriber growth numbers over the last few years. The email said the Securities and Exchange Commission asked the company "to preserve hard copy and electronic documents, e-mail, and computer contents pertaining to bulk subscription arrangements, as well any documents and other materials relating to the company's practices, policies and procedures for counting subscribers," The Wall Street Journal reported.

The bulk program comprised steeply discounted subscriptions that AOL granted to strategic partners, which in turn sold them to employees. The Journal reported that the program generated at least 830,000 subscribers during 2001 and 2002, making up nearly 17% of the company's subscriber growth during that period.

America Online is already the focus of a government probe into its revenue recognition practices, primarily the way it accounted for the proceeds of selling AOL Europe to Bertelsmann. The company revealed in its most recent earnings release that the SEC had deemed the accounting incorrect, though AOL stood by it.

AOL closed at $15.89, up 9 cents, or 0.5%, Tuesday.