Take-Two Interactive Inc. said today in a statement that it had settled an outstanding dispute with the Securities and Exchange Commission.
Without admitting or denying any wrongdoing, Take-Two said it agreed to an order that forbids the company from violating certain provisions of the Securities Act of 1933 and Securities Exchange Act of 1934. The game publisher said the Securities and Exchange Commission accepted a settlement offer, including payment of a $7.5 million fine, to end the ongoing investigation.
The company had previously recorded the $7.5 million as an expense in its fiscal fourth quarter 2004 (which ended October 31, 2004). That means the fine should have, as one analyst wrote in a memo to investors this morning, "an immaterial impact on the company's liquidity." Forbes reported that Edward Williams, an analyst with Harris Nesbitt, said, "I think the net of it is that it's very positive. It removes a cloud that has been hanging over the company and stock for three years."
"We have cooperated fully and are pleased to have resolved Take-Two's outstanding issues with the SEC," Take-Two president and CEO Paul Eibeler said in a statement.
Eibeler added, "The comprehensive company-wide changes we have instituted in recent years, including implementing a series of internal controls and procedures designed to ensure that our financial reporting processes meet the highest standard of integrity and professionalism, and making key additions to our senior executive team and Board of Directors, have made our company much stronger. We remain focused on delivering shareholder value through our leadership in the global interactive entertainment software market."
Shares of Take-Two reached a 52-week high of $29.10 in midday trading on the NASDAQ.