Take Two Interactive Pays Out $3M

by gtaadmin on 07/04/09 at 12:03 pm

Take-Two Interactive Software, the publisher of the highly successful Grand Theft Auto video game series, has entered into an agreement with the U.S. Securities and Exchange Commission and the District Attorney of New York in order to avoid legal proceedings.

The civil action relates to pending SEC charges that Take-Two had acted to falsify financial records as part of a stock option-backdating scheme. The SEC had claimed several years ago that Take-Two had backdated stock options that could be exercised at a strike price lower than where the stock was trading on the day the options were granted to its officers, directors, and key employees.

The litigation's precise wording is

during a seven year period, Take-Two defrauded investors by granting backdated, undisclosed "in the money" stock options to officers, directors, and key employees while failing to record required non-cash charges for option-related compensation expenses.

It is claimed that these fraudulant actions were committed 100 times since 1997.

Take-Two agreed to pay a $3.0 million settlement to the SEC "without admitting or denying the SEC's allegations."

The SEC made this announcement last Wednesday. Read the allegations in detail.