THQ Admits SEC Investigation Into Options

Officials from publisher THQ have revealed that the American Securities and Exchange Commission (SEC) has requested documents and information from the company, relating to stock option grant practices from 1996 to the present, the latest in a series of game companies to be affected. According to an official statement, the company noted: "Prior to receiving notification of this informal inquiry, THQ, with the assistance of outside counsel, was in the process of conducting a voluntary internal review of its historical stock option grant practices." The official comments continue: "The company initiated the internal review following extensive news coverage and analyst reports about the option practices of numerous companies across several different industries." THQ concludes that the company's audit committee "...which is comprised of independent directors of the board, intends to retain independent counsel to continue the company's internal review and oversee the company's response to the Securities and Exchange Commission." An Associated Press report following the statement noted that THQ will become one of more than 60 different companies currently being investigated by the SEC over stock option irregularities, in particular the practice of “backdating” stock option grants to time them at share price lows, thus increasing their sale price value. Most recently, Activision and Take-Two have already announced similar investigations by the SEC, with both companies also launching their own internal investigations into the allegations.