|
Take-Two says SEC launches formal options probe
2007-04-05
Take-Two Interactive Software Inc. (Nasdaq:TTWO), whose management was replaced last week in a boardroom takeover, said it received a formal order of investigation by the U.S. Securities and Exchange Commission over its past stock-options grants practices. The publisher of the popular "Grand Theft Auto" video game series said in a filing with the SEC late on Wednesday that the formal order allows regulators to subpoena witnesses regarding the stock-options practices of the company, its directors, officers or employees. Take-Two has said a review of its past options grants uncovered a significant number that were backdated during a period of more than six years to August 2003. In February, former Take-Two Chief Executive Ryan Brant pleaded guilty to criminal charges over backdating options, becoming the first ex-CEO to do so in recent probes into options irregularities at dozens of U.S. companies. The SEC investigation is also the latest in a series of woes for Take-Two, which has grappled with overstated financial results and a scandal over hidden sexual content in its "Grand Theft Auto: San Andreas." Last week, investors owning 46 percent of Take-Two replaced the company's board and ousted its chief executive in an effort to improve corporate oversight. Analysts have also said the company needs to come up with a new hit to accompany "Grand Theft Auto." Strauss Zelnick, a former chief executive at BMG Entertainment, was named Take-Two's chairman, and his business partner, Ben Feder, was named acting chief executive. Zelnick said the board aimed to outline a new strategy for Take-Two within three to six months. More than 170 companies have been investigated by U.S. authorities or have conducted internal inquiries into possible manipulation of option-grant dates. Some companies are suspected of backdating grants to days when the share price was lower, giving the recipient the opportunity for extra profit. Backdating is not in itself illegal, as long as the practice is properly disclosed and fully accounted for. Former CEOs at two other companies, Comverse Technology Inc. (Other OTC:CMVT) and Brocade Communications Systems Inc. (Nasdaq:BRCD), also face charges in separate options-related cases. Take-Two shares rose 11 cents, or 0.5 percent, to $21.54 on the Nasdaq on Thursday. They have risen around 20 percent in the year to date.
|  | | | Profile |
News64 | Gallery | Links | |
| |
|
|
| 
