THQ Faces Shareholder Suit

The company is sued over stock option practices.
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Updated from Nov. 21

Video-game publisher

THQ

(THQI)

is facing a shareholder lawsuit over its stock option grant practices.

The lawsuit, filed against some members of the board and executive officers of THQ, alleges that the company manipulated the prices of executive and director stock option grants in violation of the its own internal documents and federal laws governing securities and taxation.

The suit has been filed by New York law firm Stull, Stull & Brody, which is going after a number of companies investigating their stock option grant practices. The law firm has said it also has begun "investigating"

Millennium Pharmaceuticals

(MLNM)

,

Adobe Systems

(ADBE) - Get Report

and

Macrovision

(MVSN)

, all of which had disclosed internal investigations over stock options practices.

An internal inquiry by Macrovision found no evidence of fraud and a

Securities and Exchange Commission

inquiry was terminated with no enforcement action recommended.

Aaron Brody, one of the lawyers involved in the THQ lawsuit, and THQ did not respond to immediate requests for a comment.

"The practice results in lower payments to companies, results in those companies under-reporting compensation expenses, and permits directors, officers and/or executives to unjustifiably reap millions and billions of dollars which should be disgorged and returned to the corporate coffers thereby contributing to the financial health of the company," the law firm said in a statement.

THQ has been investigating its stock options grant practices after an informal inquiry from the

Securities and Exchange Commission

in August.

Shares of THQ were up 19 cents, or 0.6%, to $31.06.

Other game publishers including

Activision

(ATVI) - Get Report

and

Take-Two Interactive

(TTWO) - Get Report

are also investigating their stock option grant practices. Both companies also face shareholder lawsuits over the issue.

As originally published, this story contained an error. Please see

Corrections and Clarifications.