SEC may file charges against Take-Two

Regulatory commission warns that it is planning to have charges brought and fines levied against Grand Theft Auto publisher for stock option scandal.

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Take-Two Interactive Software announced Wednesday that the Securities and Exchange Commission may file charges and seek monetary penalties against the game maker, in connection with the investigation into the company's stock option scandal. The Grand Theft Auto publisher has been under investigation by the SEC over allegations that the company engaged in improper stock options pricing practices.

Last week, SEC staff members informed Take-Two that it was planning to recommend to the commissioners that charges be filed in the case and that monetary damages should be sought. The SEC then provided Take-Two with a "Wells" notice, which allows the company to issue comments and materials that state its position before SEC commissioners make a decision on whether to levy charges or fines.

"The company continues to cooperate with the staff and continues to expect to resolve this investigation by means of a settlement rather than a contested litigation of charges, and believes that the "Wells" call represents a significant step forward towards that resolution," Take-Two stated in its SEC filing.

The SEC's "Wells" notice follows guilty pleas last month from Take-Two's former general counsel Kenneth Selterman and former accounting chief Patti Tay. Both pleaded guilty to single misdemeanor counts before the New York State Supreme Court.

Discussion

67 comments
josephmadde2005
josephmadde2005

Wow they are as big a bunch of criminals as the dudes in their games.

ctg867
ctg867

Can take two do anything right? How far this company has fallen...

Pete5506
Pete5506

God, wow so many things going bad

playstation_wii
playstation_wii

the stock market is confusing, so it could have just beena mistake

Evanrocknuma
Evanrocknuma

Ha this isn't going to look good from a parents outlook on grand theft auto if you think about it. Two charges and an investigation that could lead to fines. Ha anyway I think this company probably has enough money to get through this okay so this story can be put aside in my book. :)

jeffcenate
jeffcenate

there are two diferent conversations going on here and neither of them really matter to the other. the success of GTA 4 isnt the question that the article was addresing. its talking about the company being held responcable for its employe's actions. economics 101 teaches you that a company is always held responcable FIRST for the actions of its employe's. and NO TT should NOT get a 'pass' because of 'two bad apples'. should Ford motor co. 'get a pass' if they build a bad truck that kills hundereds of people because of one engineers decision to use a bad part? should the Chineese companys that shiped poisoned tooth past 'get a pass' because some QC nerd was asleap at the switch? of corse not and the situation with TT is the same thing, the COMPANY is responcable for the actions of its employe's. thats the whole reason for articles of incorperation in the first place. so that the 'company' is established as a legal 'entity' and people who get screwed by it know whome to sue

decebal
decebal

rockstar can always publish with someone else.

mars188
mars188

well i think we wont see GTA4 for a long long time a mess

kori911
kori911

Yikes, good thing GTA IV will make all the money from the fines back, plus some.

MadGamer132
MadGamer132

everybody has problems, just released GTA IV then take care of it.

samthesolidman
samthesolidman

Give take-two a break. Let them release GTA IV, then sue..

vicsrealms
vicsrealms

No, hooligansteve my brain isn't too sore. What I did receive is a massive crit from your wall of text. ~grin~

hooligansteve
hooligansteve

"No company should ever screw with the Stock Market. Our economy is bad enough right now, we don't need some idiots trying to underhandedly make a mint at the expense of ours and our nation's future well-being." - Scynt. Dummy - this has nothing to do with manipulating the stock market. (yes, it's stock market, not Stock Market). The scandal involves stock options. To better educate anyone reading, the way stock options work is like this - as a bonus to an employee, a company can, instead of giving cash, grant the person stock options. Let's say that I wanted to grant you 100 shares of our company's (XYZ Corp.) stock today. And let's say that the share price today is $10. And that the option would mature in 1 year. So at the end of a year, you have the option to purchase 100 shares of XYZ stock at $10 a share. But in 1 year, the market price of a share of stock presumably will be higher (stock prices generally rise over time if the company is doing well). Let's say that in 1 year the market price of a share is $12. So in 1 year, you get to buy 100 shares of our stock at $10 a share. You can then, if you want, turn right around and sell those shares for the market price of $12 a share, netting you $200 profit. The scandal, as far as I can tell, involves some of the Take-Two's management back-dating their stock options. If you were awarded an option today for a price of $10 a share, you might be tempted to change that date to a year earlier, when the share price was only $8. Then, when your option matures, you can purchase the stock for $800 and sell for $1200, netting more money. This seems to be what happened at Take-Two. The company as a whole is not going down the tubes. Those who committed securities fraud will be prosecuted and the company may have to pay a fine. Now, I hope your brains aren't too sore.

vicsrealms
vicsrealms

LoJo10, thats your opinion. My opinion is that your an idiot, and I'm a smartars, but we all have a right to our own opinions. Ask Imus. ~chuckle~ Hopefully, Take-Two will pull it out. Although, I do agree with you sonicare. The people involved in the scandal should face charges and a lawsuit. Not the company itself, as the employees were not necessarily involved while making the next Game of the Year (GTA4).

Artisticle
Artisticle

As always, the silly and non topic related posts, and some good to the point posts. If I read this article right, SEC is going after Take-Two as a whole, but at the end it seems only 2 individuals for the company are taking the fault for messing with the companies stock. So is this going to be another take down the whole because of a couple idiots, or take down the couple idiots and let the whole continue with new, smarter heads to take over? Always something goin on with TT and RockStar. I wonder will they ever get credit for being such overall great game producers, or continually be ramrodded by press, angry non-responisbility taking parents, the government and all those nasty little buggers (christian coalition and the such) who just like to start crap over something original, non-christian and sometimes over the top out of the box imagination? Anyhoo, I'm not worried about games not comming out, as they will someway or another, wether it be RockStar or a company that buys them out. As for the direct people involved and responsible for this rediculous illegal action, they should be penalized and dealt with accordingly.

LoJo10
LoJo10

I hope rockstar gets the axe. They make garbage games.

sonicare
sonicare

The sad thing is, it should be the CEO/CFO or whoever else was responsible that should get sued, not the company itself.

JamesL007
JamesL007

Take-Two isn't going nowhere people clam down, they will settle this issue and than get back to making game like Manhunt 2 and GTA:IV. This is just the red tape they have to go though first thats all.

comthitnuong
comthitnuong

Take Two does not need this...Seems like everything is falling down on them.

1valiantknight
1valiantknight

Zoomer30 you don't really know what your talking about. Of course a company will put a good spin on something, they have people especially for that, however it was other people and news sites who started saying "this will probably only get more publicity for Take Two or RS." Take Two or Rock Star never actually stated that it was a good thing when they were getting sued. Maybe you should know just how clueless you are before you say some one else is. Also I don't see why you would be so complacent about what's happening. If the companies as you speculate are dead in the water we are going to miss out on many fine games that would have been brought to us by them. However GT4 is not dead in the water your just trying to stir the pot which is truly a juvenile thing to do. I simply wish Take Two and Rock Star would be left alone, they have brought many excellent games to the scene and I hate to see this happening. Like there isn't already enough bull$^ happening in the gaming world.

frankeyser
frankeyser

i dont know why everyone is saying gta 4 will never arrive. even if and it is a big if take two went under. someone would swoop in and buy them up. most likley sony. they are a pretty big publisher and would not just disappear. also they have a huge catalog of games that other companies would want in on.

Zoomer30
Zoomer30

On a side note, if the SEC went after every company that has been doing this illegal stock option thing, the entire economy would go belly up. So many people are doing it it seems to make it alright.

michirican123
michirican123

damnit i was looking forward to GTA IV well at least i'll be getting my preorder money back soon

Zoomer30
Zoomer30

hmmm....and people thought I was nuts when I said Take-Two/RS were finished. Looks like they are gettin' da gallows ready. GTA4 is dead. Dead in the water. RIP GTA, how thou shall miss thee. These companies drive me nuts to no end. Every time something bad happens they say how it is a big "win" for them, how they are getting closer to resolution. I mean a freking ASTEROID could hit TT/RS HQ and wipe out the whole place and they would be like "Wow, this is BIG win for us. Things are looking up." I wonder how much/many illegal drugs they use over at RS/TT HQ. Its the only way to explain how completely clueless they are.

darthogre
darthogre

hahahaha, good luck getting your money back from them MS......their execs probably cashed that check the day MS wrote the check. GTA4 is probably not going to release next year if these problems persist.

JunoFallon
JunoFallon

It's hard to tell these days whether TakeTwo warrants this sort of bashing all the time or if it's just another person jumping on the TakeTwo hate wagon.

Atarii
Atarii

People are so driven by money it's fun to sit back and watch them screw up sometimes and get caught. %#@$ them and I hope they get what they deserve.

Bart247
Bart247

Not only is messing with Stocks is retarted. It's also stupid and wrong. I wonder what their judgement will be.

Scynt
Scynt

If they're found guilty, I hope they burn. No company should ever screw with the Stock Market. Our economy is bad enough right now, we don't need some idiots trying to underhandedly make a mint at the expense of ours and our nation's future well-being.

RaiKageRyu
RaiKageRyu

Aww, can't Take-Two catch a break.

atomasist
atomasist

Sounds like a Martha Stewart......

kave-man007
kave-man007

[This message was deleted at the request of the original poster]

decoy1978
decoy1978

Messing around with stocks is F'ing dumb retarded. People invest in stocks and that helps business ALL AROUND. When you jerk around with investments, INVESTORS are less likely to spend money. Instead they hoard it and play it safe. If Take Two is indeed guilty, heads will roll and I'm all for that. The last thing any economy wants are underhanded stock dealings. NO ONE WINS when that happens and it hurts EVERYBODY.

caesarbites
caesarbites

Xgouse, SEC stands for Security and Exchange Commission, not Sony Entertainment Corporation. If I were you I'd change my comment before a bunch of people blast you with crazy rebuttals.

Xgouse
Xgouse

OOPS... thanks.. i thought sony was bashing them now... o well.. thanks for the update... then i have no words to this because i have no clue... but i stated and good point... laterz...

lebanese_boy
lebanese_boy

I am really sick of people picking over Take-two :evil:

tresdizzle
tresdizzle

Do this kinda stuff cause companies to go bankrupt where they have to sell their brand to another publisher who don't understand the franchise? Man this sucks, why don't they leave my boys tha **** alone?! btw jayme22, I know we have freedom of speech, but just like alot of noobs on here your abusing yours and I wish that I could give you more than one thumbs down or even a big bird.

murlow12
murlow12

More bad news for Take 2. I love it. Hopefully they will just cease to exist in the near future. You can only operate at a loss for so long...

---n00b_kid---
---n00b_kid---

I really hope this doesn't delay the release of GTA4 any further. The one game I was looking forward to this holiday was GTA4, but because development for the cell is so hard and different, T2 had to delay the 360 version aswell and so we suffered, just like Madden runs at 30 frames per second for the ps3 version, because it is difficult to develop for the cell !

NWA_31
NWA_31

Not again -_- Just leave T2 alone...

ghsacidman
ghsacidman

This is getting old. Either Take Two is really guilty... Or they are now the industries punching bag. Either way, I'm tired of seeing this crap. Like they don't get payed enough or something that they've gotta break the law! They publish one of the best selling game series EVER!!!

jayme22
jayme22

Kick em while there down thats what i say they deserve it just for putting GTAIV back im still hurting and now with there shares down they have got a court case to look foward to all i have to say in the style of the simpsons is HA HA

T-92
T-92

Hmm, if the biger company wins... well you do the math

Mar044
Mar044

anything else they want to throw at them, i tell you i wonder if someone is in the backround pulling some strings...