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Take-Two Ex-Execs Going To Court
Take-Two Interactive is no stranger to grand theft auto, but thanks to a recent ruling by a Manhattan federal judge, the prominent publisher will be taking a few of its former executives to court on a different charge: options backdating. Not as exciting, but still serious.
The accused employees are former chief executives Ryan Brant and Kelly Sumner, and former chief financial officers Larry Muller and James David. U.S. District Judge Laura Taylor Swain was in charge of the ruling, and refused the defendant’s request to dismiss the case on the grounds that the charges were brought too late, although Reuters is reporting that additional claims have been thrown out for that reason.
For those who are wondering what options backdating is, it’s the practice of issuing stock options with a date that’s earlier than the day they are actually being issued on. Options backdating isn’t always illegal, as oftentimes the approval process for issuing stock options can be delayed depending on the policies of the corporation. Options backdating becomes illegal when it’s done to intentionally take advantage of low stock prices, which is what Take-Two is alleging. It’s worth noting that Brant has already faced criminal charges in 2007 in a related case, and pled guilty to falsifying business records. We’ll bring you more on the case as it unfolds.
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