Take-Two reaches $7.5 million settlement with SEC

Developer and publisher Take-Two Interactive, parent company of Rockstar and 2K Games, has reached an agreement that will put an end to an ongoing legal battle with the Securities and Exchange Commission.

As part of the settlement, Take-Two will pay the SEC $7.5 million and has agreed to comply with certain clauses in the 1933 Securites Act and the 1934 Securities Exchange Act. However, the publisher makes no admission of any wrongdoing.

Both former and present Take-Two executives have been hit with heavy financial penalties as a result of the agreement - ex-CEO Ryan Brant will pay $3.6 million,

former VP Larry Muller will pay $1.7 million and ex-CFO James David will pay $994,000. Robert Blau, the current VP of sales at Take-Two, will pay $104,500.

The SEC claimed that Take-Two posted inaccurate revenues in 2000 and 2001, alleging that the were inflated because the publisher took account of games, such as Grand Theft Auto III, sent to retailers on an unsolicited basis. It was suggested that the publisher would then accept the returned units in another financial quarter.

"The comprehensive company-wide changes we have instituted in recent years, including implementing a series of internal controls and procedures designed to ensure that our financial reporting processes meet the highest standard of integrity and professionalism, and making key additions to our senior executive team and Board of Directors, have made our company much stronger," said current president Paul Eibler.

"We remain focused on delivering shareholder value through our leadership in the global interactive entertainment software market."