Take-Two Interactive Software has reached a $3 million settlement agreement with the US 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 today.
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. At the time, Take-Two said that 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 allegations, the SEC said. The agreement is also subject to approval by the US 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 Networks, former publisher of CNET News and GameSpot.