In federal court this morning, the city of Flint, Michigan filed a class action lawsuit against Take-Two Interactive Software, alleging fraud and insider stock trading. The suit alleges that the seller of Grand Theft Auto: San Andreas deceived investors, including Flint's pension fund, by misrepresenting the strength of the company, while concealing the fact that its largest selling video game was being pulled off the shelves and banned by major retail chains around the country due to the Hot Coffee imbroglio.
The suit alleges that the company buried this explicit content so that major retailers that would otherwise refuse to carry products containing sexual content would sell their game. By hiding the sexual content, the game could be sold with a "Mature 17+" rating, as opposed to an "Adult 18+" rating, which major retailers would not carry.
The lawsuit alleges that while the City of Flint pension fund was purchasing shares of the company as part of its Pension Fund portfolio believing that the stock was a strong investment, insiders in the company were illegally dumping hundreds of thousands of shares of stock worth over $18 million, knowing that the value of the stock would soon plummet due to the change in rating. Shortly after the company's officers sold off their stock, the news broke that Grand Theft Auto: San Andreas was being banned by retailers and the stock value plummeted, the suit alleges.
Well it looks like Take-Two can add yet another lawsuit to their long list of Hot Coffee fallout problems.
The suit alleges that the company buried this explicit content so that major retailers that would otherwise refuse to carry products containing sexual content would sell their game. By hiding the sexual content, the game could be sold with a "Mature 17+" rating, as opposed to an "Adult 18+" rating, which major retailers would not carry.
The lawsuit alleges that while the City of Flint pension fund was purchasing shares of the company as part of its Pension Fund portfolio believing that the stock was a strong investment, insiders in the company were illegally dumping hundreds of thousands of shares of stock worth over $18 million, knowing that the value of the stock would soon plummet due to the change in rating. Shortly after the company's officers sold off their stock, the news broke that Grand Theft Auto: San Andreas was being banned by retailers and the stock value plummeted, the suit alleges.
Well it looks like Take-Two can add yet another lawsuit to their long list of Hot Coffee fallout problems.
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