Publisher's shareholders begin filing class action complaints against company; insider trading and shady financial practices trumping Hot Coffee?
When Take-Two Interactive filed its annual report with the Securities and Exchange Commission Tuesday, it warned that more lawsuits could be on the way. Sure enough, the last few days have seen a pair of class action lawsuits against the company come to light.
Take-Two's filing specifically mentioned four suits it was facing in New York, Illinois, and Pennsylvania, mentioning that it had been notified of another New York suit that had not yet been served. That suit, a class action brought against the company on behalf of St. Clair Shores General Employees Retirement System and other Take-Two shareholders, has now surfaced in the United States District Court for the Southern District of New York system. And it turns out, the Hot Coffee scandal is apparently just a small part of the issue.
The suit alleges that Take-Two executives engaged in insider trading, with executives selling off more than $11.8 million shares in the middle of an SEC investigation into its accounting practices. The suit also says the company's financial reporting was fundamentally flawed, that it choked retail channels with unwanted product to boost sales figures (a charge reminiscent of the Majesco shareholder class action suit),that its recent spree of developer acquisitions (Firaxis, Irrational Games, Gaia, Visual Concepts) allowed it to better hide losses in its financial reporting, that it failed to report the departure of the chairman of its board of directors, and other potentially illegal financial practices.
Meanwhile, Game Politics is reporting on another class action lawsuits in the same District Court being brought against the company by its shareholders. The site is hosting the full text of the suit, which levels many of the same allegations against Take-Two. It cites numerous instances in which the plaintiff believes the company made false and misleading statements in order to keep the stock price high until executives could dump millions of dollars of over-valued shares into the market.
Adding to the company's woes, research firm Piper Jaffray yesterday downgraded the stock from "Outperform" to "Market Perform." Curiously enough, Take-Two stock finished the day's trading up 8 percent to $16.29, its best finish since January 26, several days before its belated annual filing.
http://www.gamespot.com/news/6143622.html
When Take-Two Interactive filed its annual report with the Securities and Exchange Commission Tuesday, it warned that more lawsuits could be on the way. Sure enough, the last few days have seen a pair of class action lawsuits against the company come to light.
Take-Two's filing specifically mentioned four suits it was facing in New York, Illinois, and Pennsylvania, mentioning that it had been notified of another New York suit that had not yet been served. That suit, a class action brought against the company on behalf of St. Clair Shores General Employees Retirement System and other Take-Two shareholders, has now surfaced in the United States District Court for the Southern District of New York system. And it turns out, the Hot Coffee scandal is apparently just a small part of the issue.
The suit alleges that Take-Two executives engaged in insider trading, with executives selling off more than $11.8 million shares in the middle of an SEC investigation into its accounting practices. The suit also says the company's financial reporting was fundamentally flawed, that it choked retail channels with unwanted product to boost sales figures (a charge reminiscent of the Majesco shareholder class action suit),that its recent spree of developer acquisitions (Firaxis, Irrational Games, Gaia, Visual Concepts) allowed it to better hide losses in its financial reporting, that it failed to report the departure of the chairman of its board of directors, and other potentially illegal financial practices.
Meanwhile, Game Politics is reporting on another class action lawsuits in the same District Court being brought against the company by its shareholders. The site is hosting the full text of the suit, which levels many of the same allegations against Take-Two. It cites numerous instances in which the plaintiff believes the company made false and misleading statements in order to keep the stock price high until executives could dump millions of dollars of over-valued shares into the market.
Adding to the company's woes, research firm Piper Jaffray yesterday downgraded the stock from "Outperform" to "Market Perform." Curiously enough, Take-Two stock finished the day's trading up 8 percent to $16.29, its best finish since January 26, several days before its belated annual filing.
http://www.gamespot.com/news/6143622.html
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