After becoming the first CEO to be convicted of stock option backdating, former Take-Two Interactive CEO Ryan Brant was sentenced to 5 years of probation today. Back in February Brant pleaded guilty to falsifying business records as part of a plea bargain to avoid jail time.
"This is a good reminder in an atmosphere where corporate heads are being sent to lengthy prison terms that, if you cooperate and you own up, you will be rewarded for your efforts,” said Thomas Curran, one of the attorneys for the prosecution.
Brant was first accused back in 2001 when he was found to have restated financial results from 1998 to inflate revenue appearances. He was made to pay a $7.5 million fine.
Brant’s plea bargain now calls for him to pay another $6.3 million to settle a civil suit, and yet another $1 million to the city of New York and state officials. All told he will have to pay $14.8 million and spend 5 years in contact with a parole officer before this monkey is off his back.
Remember that when you have your own company, kids. Play it straight.
Brant has until October to pay off his charges or his probation will be void and he will serve out the remainder of his sentence in prison.
Brant wasn’t the only one convicted in this case. Two other employees at Take-Two have been convicted as well. Kenneth Selterman, a former General Councilman, and Patti Tay who had headed up T2’s accounting offices both pleaded guilty to falsifying business records. They await sentencing.
It is unknown whether Brant played a part in his colleagues’ conviction, merely that he "cooperated with investigators."
Now I’m sure a few of you are wondering why T2 would actually need to inflate their revenue appearances in 2001. After all that was the year that Grand Theft Auto III came out and rocked the world with its massive earning power. However, at the time of the crime, Grand Theft Auto III had not yet hit store shelves.
The company likely altered their reports for the first or second quarter when they would have been losing money rapidly due to rising development costs on the mega-hit.
