On September 11, 2006, Labaton Sucharow filed a Consolidated Amended Class Action Complaint on behalf of lead plaintiffs in this securities class action against Take-Two Interactive, the developers of the Grand Theft Auto video game series. Lead plaintiffs alleged that defendants improperly backdated stock options and also made misleading statements about its premier game, Grand Theft Auto: San Andreas.
After defeating the motion to dismiss, Labaton Sucharow secured a $20.1 million settlement from the defendants. The Firm also negotiated noteworthy corporate governance reforms that required the company to adopt:
- A "clawback" provision, providing for the recovery of bonus or incentive compensation paid to senior executives in the event that such compensation was awarded based on erroneously reported financial results as an outcome of fraud or other known misconduct by the executives;
- A policy requiring its board of directors to submit for stockholder vote any stockholder rights plan of more than 12 months in duration; and
- A bylaw providing that no business may be brought before a stockholder annual meeting by a person other than a stockholder unless such matter has been included in the proxy solicitation materials issued by the company.
The case is In re Take-Two Interactive Securities Litigation, No. 06-cv-803 (S.D.N.Y.). Lead plaintiffs are New York City Employees' Retirement System, New York City Police Pension Fund, and New York City Fire Department Pension Fund. Defendant is Take-Two Interactive Software, Inc and its officers and directors.