Investor files lawsuit against Take-Two

Take-Two Interactive is facing yet another legal battle, this time from an investor who claims that the company has wasted corporate assets, abused control and shown gross mismanagement in recent years.

The lawsuit, filed on July 12th by shareholder Richard Lasky, alleges "breaches of fiduciary duties and unjust enrichment" dating back to 2000 and further alleges that the company's directors have improperly backdated stock options as far back as 1997.

The shareholder's allegations follow recent news of an informal investigation by the SEC into stock option irregularities. Take Two has stated that it will fully comply with the investigation, having launched its own internal enquiry into the situation.

Problems at the publisher flow much deeper than the stock option scandal, according to the lawsuit, Lasky accusing executives of illegal insider dealing to the tune of US$31.77 million and highlighting the now infamous Hot Coffee scandal as evidence of the company's attempt to maintain share price by withholding pertinent information from the ESRB and its consumers.

"This continuing decline in the quality and accuracy of Take-Two's financials is further indicative of the defendant's conscious disregard for the company's welfare. Indeed, defendants appear to be more interested in looting the company via the illegal re-pricing of stock options, rather than issuing accurate and truthful financials," the lawsuit alleges.

Lasky's claims form part of a growing number of complaints levelled at directors and executive management at Take-Two, the publisher having recently dealt with numerous claims of accounting irregularities, investigations from both the SEC and FTC and a Grand Jury subpoena which analysts believe could lead to criminal indictments for several company directors.