Take-Two Found Guilty in Stock Option Investigation

Take-Two Found Guilty in Stock Option Investigation


As reported previously, Take-Two Interactive is being investigated by a Special Committee comprised of three independent members or Take-Two’s Board of Directors. The investigation is also being assisted by outside legal counsel Kasowitz, Benson, Torres & Friedman LLP and independent accountants BDO Seidman, LLP.

The Special Committee has preliminarily completed the investigation including a review and analysis of documents and emails, and interviews of current and former officers, directors, employees, and advisors to Take-Two. The Special Committee has found improprieties in the process of granting and documenting stock options and that incorrect measurement dates for certain stock option grants were used for financial accounting purposes.

The investigation did not find misconduct by Take-Two’s current executive officers including Paul Eibeler, CEO, and Karl Winters, CFO.

The Board of Directors has determined that the company will need to restate historical financial statements to record non-cash charges for compensation expense relating to past stock option grants. All consolidated financial statements, earnings releases, and similar communications issued by the company between 1997 to April 30, 2006 will no longer be relied upon.

Take-Two and its independent auditors are currently reviewing the findings of the Special Committee.

The company has also requested an extension of time to file its Form 10-Q, solicit proxies, and hold an annual meeting.

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