Take-Two settles stock options-backdating case

Company behind Grand Theft Auto agrees to pay a $3 million penalty fee to settle its case with the Securities and Exchange Commission, the agency announces.

Take-Two Interactive Software reached a $3 million settlement agreement with the U.S. Securities and Exchange Commission, relating to charges that the game publisher engaged in falsifying financial records as part of a stock option-backdating scheme, the SEC announced Wednesday.

A settlement agreement had largely been expected, after Take-Two announced two years ago that it had received a notice from the SEC's staff that it would recommend that charges be filed against the company. Take-Two, at the time, said the company expected to pursue a settlement agreement, rather than fight regulators in court .

Take-Two agreed to the settlement without admitting to or denying the SEC's allegations, the SEC said. The agreement is also subject to approval by the U.S. District Court for the Southern District of New York.

The case centered on allegations that Take-Two backdated stock options for its officers, directors, and key employees that could be exercised at a strike price lower than where the stock was trading on the date the options were granted. The SEC alleged that Take-Two defrauded investors by failing to properly record the stock option compensation grant date and strike price.

Take-Two is just one of a number of companies over the past several years to pay multimillion-dollar settlements to the SEC in connection with stock option-backdating cases. Brocade Communications was among the first companies to become embroiled in the SEC cases, which also later affected security software maker McAfee, Apple Computer , and CNET News' former publisher, CNET Networks.

 

Join the discussion

Conversation powered by Livefyre

Show Comments Hide Comments
Latest Galleries from CNET
Best cameras for foodie photographers (pictures)
10 mobile gadgets gone gonzo (pictures)
Apple in 2014: iPhone 6, iCloud hack, Beats and more (pictures)
The 12 most distinctive phones of 2014 (pictures)
Best mobile games of 2014
Nissan gives new Murano bold style (pictures)