EA being investigated by Security Exchange Commission....

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limelicker

CAGiversary!
This is never a good sign when they start checking option prices in a company. Where there is smoke, there's usually fire.........

From IGN.....

SEC Probes EA
EA joins other publishers in government investigation of stock options.
by Wade Steel

September 21, 2006 - Electronic Arts, the world's largest videogame publisher, revealed today that it had received an informal request on September 14, 2006 from the Securities and Exchange Commission (SEC) for "certain documents and other information related to its stock option grant practices dating back to January 1, 1997."

The request to EA is part of a wide-ranging investigation by the SEC into the stock option executive compensation practices of more than 100 technology firms to determine if any manipulation of the price of the stock occurred. In addition to EA, publishers Activision, THQ, and Take-Two Interactive have also received similar requests from the SEC.

In July, EA claimed that it had conducted an internal review of 10 years of stock options data that revealed no evidence of impropriety. However, the company stated that it will cooperate with the SEC on all matters related to the current inquiry.
 
[quote name='Puffa469']I wouldnt worry too much about this. It definitely wont affect their games in any way.[/quote]

Exactly. They'll be shitty and rehashed as always.
 
This is not a big deal. There are lots of companies that the SEC is investigating for the exact same thing. The issue is that typically options are granted at FMV of the stock price on the date of grant. The idea is for an executive to work hard, create a succcessful company and watch the stock price rise and cash in down the road. The lower the option price the more money an executive can make so a lot of times options are granted to an executive on a particular date where the stock was really low (and a lot of times they are shown as granted on the date that the stock was the lowest all year - oops). Backdating has probably been going on forever... there are tax and accounting issues that will need to be dealt with and there's always the possibility of some SEC punishment or a shareholder suit against EA but the reality is that some higher-ups might lose their jobs (assuming the investigation reveals an impropriety) and that's probably it.
 
[quote name='Strell']Big deal.

They do that every year, only with new rosters.[/QUOTE]


wins. :lol:


/thread over
 
There are TONS of companies under investigation for backdating options, with some of them being threatened to be delisted (i.e. Apple, Dell, nVidia). I think most of the companies near where I live are or were under some sort of investigation for this. Not big news (at least not big EA news).
 
[quote name='FriskyTanuki']I like how they quietly mention that Take-Two, THQ, and Activision are also in the same boat like it's not a big deal for them.[/quote]
Exactly. If EA fired 3 employees because they developed that $hitty NFL Head Coach game, you would hear people bitching for the next 6 months. If Ubi or THQ does the same thing, you don't hear it at all. You never see Nintendo get this kind of treatment, mainly because their "Games" business is just a front for their real operation: naked lady playing cards.
 
[quote name='kennistond']Am I the only one who got this?:lol:[/quote]
They are just a patsy. The SEC should be going after the British developers like Rare.
 
[quote name='javeryh']This is not a big deal. There are lots of companies that the SEC is investigating for the exact same thing. The issue is that typically options are granted at FMV of the stock price on the date of grant. The idea is for an executive to work hard, create a succcessful company and watch the stock price rise and cash in down the road. The lower the option price the more money an executive can make so a lot of times options are granted to an executive on a particular date where the stock was really low (and a lot of times they are shown as granted on the date that the stock was the lowest all year - oops). Backdating has probably been going on forever... there are tax and accounting issues that will need to be dealt with and there's always the possibility of some SEC punishment or a shareholder suit against EA but the reality is that some higher-ups might lose their jobs (assuming the investigation reveals an impropriety) and that's probably it.[/QUOTE]

The article says they're one of a more then a hundred companies being investigated.
So I can't see it being a horrible thing.
 
[quote name='Kendal']God I hope they find them building houses in Iraq.[/QUOTE]


Nope, got you....actually beat you to it :) Well, kinda...
 
More severely, Take-Two is running the risk of being delisted by NASDAQ for missing some quarterly filings or something like that.
 
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