Take-Two Under Formal SEC InvestigationTake-Two Under Formal SEC Investigation

A U.S. Securities and Exchange Commission (SEC) filing from Rockstar Games owner Take-Two Interactive has revealed that the company is now under formal investigation by the commission after concerns over stock options grant practices. The company was the subject of an informal, non-public, investigation into allegations of back-dating stock option grants last year, while a separate internal investigation by Take-Two also found evidence of improprieties. The scandal ultimately led to the departure of then chairman and CEO Ryan Brant, who was singled out by the SEC investigation and was forced to pay $7.3 million in “disgorgement, interest and penalties” at the New York State Supreme Court. The original SEC investigation named Brant as one of the figures who went on to "control and dominate the granting process" for options. The SEC found that Brant personally received ten grants of backdated options, worth nearly 2.1 million shares, which were later exercised for millions of dollars. The new, formal, investigation will allow regulators to subpoena witnesses over stock option practices of the company, its directors, officers and employees, according to a Reuters report. Take-Two has seen itself at the center of a seemingly endless series of financial scandals, including both stock option backdating and the infamous “Hot Coffee” mod, which have recently culminated in Take-Two shareholders voting in former BMG Entertainment CEO Strauss Zelnick as the company's new chairman and his business partner Ben Feder as CEO.