Take-Two Interactive is being sued again, as its recent SEC filing warned was a possibility, in a lawsuit by one of its stockholders charging the company of insider trading and mismanagement. John Fenninger, who holds Take-Two common stock, filed a motion against the company for "fraudulent scheme and course of business."
The motion alleges that several of the company's higher executives, including CEO Paul Eibeler, failed to provide potentially damaging information, leaving the company open to the ratings changed caused by the hidden "Hot Coffee" content in
Grand Theft Auto: San Andreas, as well as (ironically) shareholder lawsuits.
The language of the suit appears to hold the executives responsible for misleading the public and SEC regarding the Hot Coffee scandal, alleging that the executives lied in in submitting a Form 10-K and Form 10-Qs that made no mention of the sexual material in the game.
Take-Two has come under fire from several quarters recently, with board member Barbara A. Kaczynski
resigning from the company, citing transparency problems; Kaczynski's lawyer Bruce Baird provided an echo of Fenninger's claims in saying "Ms. Kaczynski felt that management failed to keep the board informed of important issues facing the company or failed to do so in a timely fashion."
Fenninger is represented in the suit by law firm Schatz & Nobel, and filed in New York's district court. No trial date has been set.
