RSSAngry Shareholders Sue GTA Publisher
By Ed Oswald | Published February 15, 2006, 3:35 PM
Game publisher Take Two is facing two more lawsuits, this time from separate shareholder groups seeking reparations for losses incurred over the discovery of pornographic material in Grand Theft Auto: San Andreas.
The suits were announced by the law firms Milberg Weiss on Tuesday and Stull, Stull & Brody earlier this week. Both seek class action status, and are looking for shareholders who owned Take Two stock between the launch of GTA: San Andreas in October 2004 and January 27 of this year, the day the company was sued by the Los Angeles city attorney's office.
Both complaints allege that Take Two acted illegally in concealing the pornographic material later found in the game, which "was the largest game launch in the Take Two's history," the company said at the time.
GTA: San Andreas played a large part in the positive earnings of the company, the suits allege, and when the discovery of the "Hot Coffee" mod was made public, the resulting drop in Take Two's stock price hurt investors financially.
Although the company did attempt to right itself, the surrounding publicity forced Take Two subsidiary Rockstar to pull the game from store shelves. GTA: San Andreas was rated AO, or adults only, by the ESRB -- a rating many retailers refuse to stock, significantly cutting into overall sales of the game.
Even the Federal Trade Commission stepped in, announcing it would investigate the game and the "Hot Coffee" mod. Worse yet, the company said it has found problems in its financial accounting, and a board member who was the audit committee chairperson and member of the corporate governance committee had resigned over the issue in late January.
According to a statement, she said that "management failed to keep the board informed of important issues."
At least one of the suits alleges insider trading so that higher-level executives could unload their stock to avoid heavy losses.
"Defendants were motivated to engage in the fraudulent and illegal conduct during the class period in order for company insiders, including the defendants, could sell more than 661,000 shares of their personally-held take-two stock for proceeds of over $18 million," a statement from the law firm read.
Take Two is refusing to comment on the matter.
Next version they should have two new features:
(1) ability to shoot shareholders and rape lawyers.
(2) ability to do both simultaneously to City Attorneys and FTC censors.
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|I like sheeps, I'm voting for a free America !
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|This goes beyond the rising and falling of stock prices and the shareholders losing money. It is much the same as all the dirty little games companies play in hopes to get an edge at shareholders expenses. There were instances of money mismanaged when the board found out they were losing stock.
Though money has brought about the legal ramifications, this is about a company placing additional content onto the consumer that resulted in negative consequences. Whether it was agreed upon by the board of directors and shareholders is what needs to be decided upon in court. If this is just some programmers joke, which it didn't sound like from the articles, then the shareholders need to deal with it. If the company knew of this twist, but did not disclose it to the shareholders and purposefully done so, they should be allowed to sue for the loss.
When this game was pitched to the company, there most likely(I was not there) was not mention of this hidden content, but Take Two knew of it and admitted to it. It was kept quiet from everyone else and therefore Rockstar should be held liable. They practically knew they were going to lose and therefore people began jumping ship and moved stock around.
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|you buy stock - you take risk - that's the game.
I"m sure they wouldn't be sueing if the publicity had doubled the stock price.
before you know it all companies will be in threat of being sued for making bad decision - this is a bad thing if the class action wins
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|Selling pornography (animated or otherwise) to a minor is illegal. The game had an M rating when it first shipped, but like most ratings (MPAA, etc) these are pretty much worthless as anyone under 15 can tell you how many R rated movies they've been in without a parent or guardian accompanying them.
Regardless of what the content of the game was, the company ended up in trouble because of it and lost revenue because of having to pull the game from stores.
The Senior Management, if they did dump their stock before news came out that they were pulling the game, and that it would affect revenue is illegal. It's called "insider trading" and Martha Stewart just spent time in prison because of it.
As for "cooking the books" as they say, ask the heads of Enron for whether this is allowed or not.
Again - the content of the game is not why the investors are suing, they are suing over the loss of money because of the improper and illegal practices that the heads of the company appear to have been doing.
The DA in LA is suing them because they new the material was in the game, it should have been rated AO at the start, but they concealed that information so that they would get an M rating - meaning that most of the stores out there would stock it.
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|GTA, a long running series of titles that all include violence, murder and 'theft' and they are upset about a mod that depicts mild pornography? come on, wake up and smell the coffee!
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|No, they are upset that RockStar is making so much money and they think they should get another piece of it because of unenabled content that the US spazzed over.
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|errr... if you read carefully, they are more concerned about losing $$$ than anything else.
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|Excuse me? I thought when you played the stock market, you take a chance? Some times you win, some times you lose. If you don't want to take the chance, then you don't invest. I think stock holders are a spoiled bunch of brats that want to bet on a sure thing, and are crying because the sure thing was so sure!
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|They did say that there wasn't any pr0n the first few days... not that stockholders are allowed to sue for bad moves. Having pr0n in a game is NOT, repeat NOT illegal. But let's not call this pornography, considering it was actually at most animated sex.
Thus, if lying to the media = culpability, we've reached a very new low in America. That would mean we can sue every politician, sports franchise, and car dealer!
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|Maybe the shareholders need to be in jail. Because they have obviously been smoking something.
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|Publicity. What a great way to draw attention to GTA and Rockstar. It's unfortunate that law suits may take place but I think it will merely increase the overall visibility of GTA and Rockstar. Any publicity is good publicity, bad or good.
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|Not only was the simulated porn mild and legal, it brought great attention to the game and increased sales. The little rich shareholders just want the American dream: to sue someone for money.
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|You know all this how?
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|wow all this stirup of sueing and in courts can'rt wait for the next GTA
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|Mmm...my metaphor below got a negative. I guess betanews editors didn't see the similarities. Perhaps next time I should use the more standard "flog a dead horse" saying?
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|Lets all grab a cat by the legs and drag it for 20 miles to see if it bleeds!
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|Ummm...what?
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|It was a metaphor. Everyone is jumping onto the bandwagon and grabbing rockstar by the legs to try and get $$$ out of them.
I'm surprised nobody figured that out. :/
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|Is that not a risk in going into the share market?
There are some people in this world who need to babied in their handeling of money, when you buy shares in anything, there is a risk you will lose money or make money, people need to relise this and think about it.
They need to understand that their is being used by handled by someone else!
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|"Both complaints allege that Take Two acted illegally in concealing the pornographic material later found in the game, "
Um....was it actually illegal? Or just bad business?
Seriously people. Can't we all just get a life?
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|What for? I'm so happy WITHOUT one ... :D
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|My goodness! I tried so hard to see the other point of view but people just can't leave it be until the US Supreme Court makes a decision! This is a sad day.
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