Following
recent news that major publisher Activision was the subject of a lawsuit from a shareholder over what was described as "purported improprieties in the Company's issuance of stock options", possibly relating to the currently hot topic of option backdating. The Securities and Exchange Commission (SEC) has launched its own formal investigation into the company's options practices.
According to an official statement, the SEC notified Activision on Friday of its intentions, and that the company "intends to cooperate fully and respond to the SEC's inquiry." In addition, the report noted that several unnamed members of Activision's board will launch their own internal investigation concerning the company's stock practices. It is currently unknown if either investigation will include the previous allegations of option backdating.
The probe seems to echo a
recent official SEC announcement that Take-Two was being investigated by the agency over the granting of stock options, particularly with reference to when the options were dated when they were handed out - part of a wider monitoring affecting other sectors beside games.
A
related report on financial site TheStreet.com noted that Activision's stock has been one of the more prosperous video game company stocks on the market in recent years, at least in comparison to a number of other game companies.
However, the company, which is set to publish a number of titles for next-generation platforms including
Call of Duty 3 and
Marvel: Ultimate Alliance, has not found itself immune to the decline in sales and lower revenues that have swept across the video game sector in the face of a particularly difficult console hardware transition.
