SEC Begins Inquiry into Take-Two's Options
Take-Two Interactive (TTWO) is facing another inquiry by the Securities and Exchange Commission, this time over its stock-options grants.
The video-game software maker disclosed on Monday that the SEC has launched an informal investigation into its grants dating back to 1997. The company did not say what prompted the SEC's inquiry or what the regulator was investigating.
"The company intends to respond to the SEC's information request and to fully cooperate in the informal investigation," the company said in the statement.
A Take-Two representative declined to comment on whether the SEC's inquiry related to allegations of the backdating of options. More than 50 other public companies are being investigated by the SEC and other regulators over charges that they handed out options to executives and employees at extraordinarily low exercise prices that were known after the fact.The SEC's inquiry follows Take-Two's own internal review of its stock-options grants, the company said in a statement. A committee of three of the company's independent directors has hired an unnamed independent lawyer and accountants to help with that investigation, which is still ongoing, a company representative said. The Take-Two representative declined to comment on whether the internal review is looking into the issue of whether any of the company's options grants were backdated. But the company initiated the review after seeing other companies conduct their own reviews as part of the backdating scandal, the representative said. "The board is aware that this is an issue to investors generally," the representative said. Take-Two stock fell more than 5% on the news, which comes just two weeks after the company announced that it had been subpoenaed by the New York County district attorney. That investigation is apparently a much broader one than the SEC's, involving the hidden explicit "Hot Coffee" sex scenes in its Grand Theft Auto: San Andreas game and the termination of its auditors, among other things.
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