slipped after the video game publisher disclosed that the
Securities and Exchange Commission
has launched a formal investigation into the company's stock option grant practices.
Activision's stock was recently down 5.3%, or $1.03, to $18.54.
The Santa Monica, Calif. based company, known for its
Call of Duty
series of games, said it received a letter of informal inquiry from the SEC last July requesting some documents and information relating to the company's historical stock option grant practices.
Earlier this month, the SEC changed its posture to a "formal" investigation that allows the commission to subpoena witnesses and require the production of documents, the company said.
A representative of the Department of Justice attended some of the meetings that Activision has had with the SEC and requested copies of some documents provided to the staff of the SEC. But the company has not yet received any grand jury subpoenas or written requests from the DOJ, Activision said.
Following a seven-month investigation, Activision
had earlier cleared CEO Robert Kotick and its current management of any intentional wrongdoing.
Instead, it pointed to the outgoing head of human resources, former heads of finance and legal, and a former outside legal adviser for "inaccuracies" -- but said that there was no "intentional wrongdoing."
Activision said its special subcommittee investigating the grants found that 3,450 of the option grants reviewed, covering 148.7 million shares, required measurement date corrections.
As a result, Activision recorded approximately $66.7 million in additional pretax noncash stock-based compensation expense over the 13-year period from April 1, 1993, through March 31, 2006.