SEC moves onto another publisher -- THQ
by Nick Doerr 
{ Aug 14th 2006 at 10:00AM }
The Securities and Exchange Commission has launched a probe into THQ's option grants, requesting documents and info relating to THQ's option-granting practices. THQ is, of course, cooperating and have even said they had launched their own investigation predating the one by the SEC. THQ doesn't know, however, what the SEC (or their own investigation) is looking for, exactly. The stock option generally grants "insiders the right to buy their company's stock at a price equal to the market price of the stock on the day the options are granted." The main concern, it appears, is something called backdating. This is where companies assign a price to the stock for insiders equal to the market price at a known low in stock prices. Who's happy to learn a lesson about the business of Wall Street?It really seems the SEC is cracking the whip at the American game companies -- Activision and Take-Two were probed recently as well. If these companies, let alone THQ for the moment, are found guilty of questionable practices with their stocks, that could be very dangerous and a serious drop in the American video game development market. Nothing permanently damaging, but it would still hurt. Be careful, development community! The SEC may probe you next and it won't use fancy rubber gloves.
