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The regulator has upgraded its backdating investigation of the company behind "Grand Theft Auto."
Stephen Taub, CFO.com | US
April 5, 2007
Take-Two Interactive Software, the video game maker best known for its "Grand Theft Auto" video game, said in a regulatory filing that the Securities and Exchange Commission has upgraded its probe of its stock options practices to a formal investigation.
A formal investigation means that the SEC has the power now to subpoena witnesses in connection with the investigation of the option practices of the company and its directors, officers, and employees.
The announcement came one week after dissident shareholders took control of the board of directors.
News of the formal investigation is the latest blow for the embattled software company, which has restated its results on four different occasions in the past five years. In June 2005, Take-Two and four executives settled SEC charges stemming from an investigation into the company's accounting practices, which spawned the first three restatements.
In February, former chairman and chief executive officer Ryan Brant pleaded guilty to falsifying records, becoming the first CEO convicted for his role in the widening stock-option backdating scandal.