NEW YORK, March 10, 2006 (PRIMEZONE) -- The Law Offices of Bruce G. Murphy has filed a class action lawsuit in the United States District Court for the Southern District of New York, on behalf of shareholders who purchased or otherwise acquired the securities of Take-Two Interactive Software, Inc. ("Take-Two" or the "Company") (Nasdaq:TTWO) between October 25, 2004 and January 27, 2006, inclusive (the "Class Period"). The Law Offices of Bruce G. Murphy is seeking to pursue remedies under the Securities Exchange Act of 1934 against defendants Take-Two, Paul Eibeler, Karl H. Winters, and Gary Lewis (the "defendants").
The Complaint alleges that, during the Class Period, defendants made numerous misrepresentations about the success of the Company's video game Grand Theft Auto: San Andreas, and the strong contribution that it was making to the Company's overall revenues. As alleged in the Complaint, defendants failed to disclose that it had improperly hid pornographic materials directly in the programming of the Grand Theft Auto: San Andreas game. The Complaint further alleges that defendants failed to disclose the inclusion of the pornographic materials in order to obtain a rating of "Mature 17+" by the Entertainment Software Rating Board ("ESRB"), a private independent group that rates video games. As alleged in the Complaint, had the ESRB known of the pornographic materials contained in the game, it would have assigned it a rating of "Adults Only 18+" and it would not have been carried for sale in the major retail chains, such as Wal-Mart and Target, who refuse to carry such games. Indeed, when it was subsequently disclosed that the ESRB had revised its rating on the game to "Adults Only 18+," the Company was forced to reduce its financial guidance.
On January 27, 2006, the last day of the Class Period, it was announced that the City Attorney for the City of Los Angeles had filed an action against the Company and its subsidiary for making misleading statements in the marketing of Grand Theft Auto: San Andreas, and engaging in unfair competition. The action sought disgorgement of the Company's profits from the sales of the game in California before the game was re-rated.
In direct response to this announcement, Take-Two's stock price plunged approximately $2.34 per share, or 13.7%, on more than 21 million shares traded - approximately ten times the average daily trading volume during the preceding 12 months. Prior to the announcement, however, company insiders, including the defendants, were able to capitalize on the inflated stock price, and sell more than 661,000 shares of their personally-held Take-Two stock for proceeds of over $18 million.
If you purchased or otherwise acquired Take-Two securities on any exchange between October 25, 2004 and January 27, 2006, and sustained damages, you may, no later than April 3, 2006, move the Court to serve as lead plaintiff. Shareholders outside the United States may also join the action, regardless of which exchange was used to purchase the securities. To serve as lead plaintiff, however, you must meet certain legal requirements. If you would like to discuss this action, this announcement, or your rights and interests, please contact plaintiff's counsel Bruce G. Murphy of the Law Offices of Bruce G. Murphy.