"The conduct was so outrageous that even Worldcom's C.F.O. Scott Sullivan was troubled by what AOL was doing," Friestad said.

Friestad said the complexity of the case required the S.E.C. to move deliberately on an investigation into events dating back to the period of 2000 to 2002. The S.E.C. will hold fraud perpetrators accountable "even if it takes a while to investigate and examine that conduct because of the complexity of the transactions at issue," said Friestad.

Another S.E.C. official, speaking on condition of anonymity, said it could be "a number of years" before trials begin in the cases of the four former executives who did not settle. That raises the possibility of a 2010 trial in which witnesses will give testimony about events from 10 years earlier.

AOL's sometimes clumsy attempts to generate advertising revenue, a key metric watched by the company's accountants, involved a technique known as roundtripping that was popular in the days of the dotcom bubble but no longer prevalent.

In one example from November 2000, emails and instant messages obtained by the government show AOL employees rushing to turn a negotiated discount on telecom services from a supplier, Telefonica, into advertising revenue. Telefonica agreed to buy AOL ads with the money it would have returned as a rebate.

In order to book the revenue before the financial quarter that ended December 31 of that year, AOL created "its own purported ads" for Telefonica that misspelled the company's name as Telephonica and linked to a dead webpage. "No graphics, no links, no nuthin! LOL," an unnamed AOL employee wrote in an instant message. Replies another colleague: "Welcome to the new world of e-commerce."

Friestad, who oversaw the investigation, said the case remains relevant to investors and analysts who rely on performance measurements from outside of the closely regulated world of generally accepted accounting principles. To AOL, for instance, it was critical to classify as much as it could as advertising revenue, even though the classification would be irrelevant to its cash flow.

"The metrics sometimes change over time, but the conduct here involved a metric that was important to analysts and investors," he said. "The conduct was fraudulent then, and it would be fraudulent if it happened today."

An attorney for Jay Rappaport said the former AOL senior manager was "pleased this matter has been resolved" without restrictions on his ability to be a future corporate officer of a public company. Attorneys for the others named in the suit did not return calls for comment.

A spokeswoman for Time Warner's AOL division said the company no longer employed any of those charged, but had no further comment.