Take-Two exec pleads guilty to stock fraud
Los Angeles (CA) - Ryan Brant, chairman and CEO of the company most famous for Grand Theft Auto, is now finding himself in the middle of a real-world legal drama. Brant has pled guilty to falsifying financial records and faces a potential sentence of prison time and more than $7 million in fines.
Brant admitted to being at the center of a long-running investigation into Take-Two's accounting practices that sparked a much publicized investigation by the Securities and Exchange Commission (SEC), which oversees the stock market.
Upon probing the company's records, the SEC found that Take-Two was involved in the deceptive practice of backdating stock option grants to essentially go back in time and claim compensation at times right before the stock price fell.
"I am deeply sorry for my role in the inappropriate matter. I accept responsibility for my actions and apologise to the company's shareholders," said Brant in a statement. He is awaiting sentencing from a Manhattan court on August 1. In the mean time, he has been ordered to pay $7.3 million in disgorgement, penalties, and interest as part of the ruling in the criminal case. Unlike other stock fraud cases, Brant's actions did not cause any real problems for common shareholders, so a follow-up civil suit is not likely.
The SEC investigation is one of a number of headaches that have surrounded both Take-Two and Rockstar. The two companies have faced civil cases against the wrongful deaths of people in GTA re-enactment scenarios. More memorably, though, was the locked adult content in GTA: San Andreas that was uncovered and sent the company into all kinds of investigations, faced penalties from the Electronic Software Ratings Board (ESRB), and caused the game to be pulled from thousands of store shelves.