SEC closes EA investigation

Government regulators have wrapped up examination of publisher's stock options practices with no punishment levied.


Last year, a flurry of publishers saw their stock option granting practices come under investigation by the Securities and Exchange Commission. Among the companies affected were THQ, Activision, Take-Two Interactive, and Electronic Arts. While some of those inquiries are still outstanding, one of them has wrapped up, as EA this week revealed to investors this week that it is officially off the hook with the SEC.

"On September 14, 2006, we received an informal inquiry from the Securities and Exchange Commission requesting certain documents and information relating to our stock option grant practices from January 1, 1997 through the date of the letter," the publisher wrote in its latest quarterly report. "We cooperated with all matters related to this request. On October 31, 2007, we received a letter from the SEC informing us that they had terminated their inquiry and that no enforcement action would be recommended."

Of the remaining inquiries, Take-Two's has progressed the farthest. The SEC began a formal probe into its stock options practices, and in August warned that it may file charges and fine the Grand Theft Auto publisher. Take-Two's situation differs from those of its competitors, as its former CEO, former general counsel, and former chief accounting officer have all pled guilty to criminal charges related to the scandal.

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