Take-Two Facing SEC Charges

Take-Two Interactive may be facing Securities and Exchange Commission charges over its past stock option practices, the company announced yesterday.

The company said the SEC intends to seek authority to file charges and pursue a civil penalty, and that it has received a Wells notice giving Take-Two an opportunity to respond and convince the SEC not to file charges. Take-Two said it intends “to resolve this investigation by means of a settlement rather than a contested litigation of charges. … The “Wells call” represents a significant step forward towards that resolution.”

The move is the latest in a series SEC-delivered blows against the company; earlier this year, the company’s former chairman and CEO, former chief accounting officer and former top legal counsel all pleaded guilty to charges related to illegal stock option activities. Poor financial performance over the previous year also led to a shareholder-led ouster of most of the company’s board of directors, while the company has faced more recent woes with long-term delays in the release of two high-profile products: Manhunt 2 and Grand Theft Auto IV. In June, the company announced layoffs and closures in both the U.S. and U.K. as part of a restructuring and consolidation plan.