Ryan A. Brant, the former chief executive officer of video game publisher Take-Two Interactive Software, has pleaded guilty to charges of falsifying records to backdate stock option grants at the company, Manhattan District Attorney Robert M. Morgenthau announced.
Prosecutors say Brant backdated Take-Two stock option grants to coincide with the dates of the low or near-low Take-Two stock price for a particular period or quarter. The backdating benefited Brant, other senior executives, and employees, prosecutors say.
"If people are to have confidence in our financial markets, it is critical that public companies report their financial condition accurately," says Morgenthau. "CEOs and other executives who deliberately skew their books to hide the full extent of their compensation are engaged in a fraud on their stockholders and creditors. When we uncover these unlawful schemes, the executives responsible can expect to be charged criminally."
In a seven year period, from 1997 to 2003, Brant received ten backdated option grants for a total of approximately 2.1 million shares of Take-Two stock, all of which he exercised before resigning from the company in October 2006, Morgenthau says.
Brant entered a plea of guilty in New York County Supreme Court to falsifying business records in the first degree, a class "E" felony. Morgenthau expects Brant to be sentenced to a term of probation.
In settlements with the district attorney's office and the United States Securities and Exchange Commission, Brant will make a total payment of $7,261,606.
Take-Two Interactive Software is the publisher of the video game Grand Theft Auto.