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Take-Two former execs plead guilty in options case

Pleas are the latest woes for game developer that has grappled with overstated financial results and a scandal over hidden sexual content in game.
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Written by Reuters on
Take-Two Interactive Software's former general counsel and former chief accounting officer have pleaded guilty in connection with a case over the company's stock options practices, a prosecutor said on Friday.

Former general counsel Kenneth Selterman and former chief accounting officer Patti Tay each entered guilty pleas to a single misdemeanor count in New York State Supreme Court in Manhattan, said James Kindler, chief assistant district attorney in Manhattan.

Selterman pleaded guilty on June 6. He has agreed to a $50,000 fine and faces 200 hours of community service, Kindler said. He is to be sentenced on Aug. 8.

Tay is going to give up more than $300,000, and is scheduled to appear before the judge on Aug. 2, he said.

"She is looking forward to putting this matter behind her," Tay's lawyer Nina Beattie said. Selterman's lawyer declined to comment.

The guilty pleas are the latest development after a series of woes for Take-Two, a developer of video game software that has grappled with overstated financial results and a scandal over hidden sexual content in its Grand Theft Auto: San Andreas.

"We're continuing to cooperate with the district attorney as well as other governmental agencies to press for a resolution of outstanding legal and regulatory issues," Take-Two spokeswoman Meg Maise said on Friday. "We believe we're making significant progress toward a resolution of these matters."

In February, former Chief Executive Ryan Brant pleaded guilty to criminal charges over backdating options, becoming the first ex-CEO to do so in recent probes into options irregularities at dozens of U.S. companies (including CNET Networks, publisher of CNET News.com).

Take-Two has said a review of its past options grants uncovered a significant number that were backdated during a period of more than six years ending in August 2003.

Its management was replaced earlier this year.

More than 180 companies have been investigated by U.S. authorities or have conducted their own internal inquiries into possible manipulation of option-grant dates.

Story Copyright © 2007 Reuters Limited. All rights reserved.

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