Manhattan Judge Laura Taylor Swain has ruled that a lawsuit by Take-Two shareholders against former CEOs Ryan Brant and Kelly Sumner and former CFOs Larry Muller and James David can now move forward.
The suit against the former executives involves illegally backdating stock options, according to Reuters.
Company founder Brant is already on five years probation following a plea of guilty in 2007 for falsifying business records due to stock options backdating. He was also ordered to pay $6.3 million in a civil case, and another $1 million to NYC and state officials.
What this is all about, in case you are not versed in stock and securities, is that by backdating stock options, "employees can make sure they are granted stocks when prices are low, making the options more valuable to them", according to GI.biz.
Apparently this is okay, but not declaring that it's been done is against the law.
Doing so also ups the company's earnings and stock prices, and because of this, Take-Two was forced to pay a settlement to the SEC of $3 million last April. It also agreed to pay $300K to the office of the Manhattan District Attorney.
Sounds like a mess. Greed is not good, sometimes, apparently.