No fraud on options, but...

THQ Inc., the Agoura Hills-based videogame company, says its independent investigation of stock option practices found no evidence of wrongdoing - that is, the deliberate backdating of options - but it used "incorrect measurement dates" and will thus record an $11 million noncash charge. Basically, the company says it messed up, but didn't do anything illegal. Wall Street seems satisfied (boy, that didn't take much). "In our view, the company is very close to resolving its options backdating issues. Although the SEC investigation is still ongoing, we view this news as a positive signal," Wedbush Morgan Securities analyst Michael Pachter said in a client note. But doesn't "incorrect measurement dates" sound like backdating? THQ shares were up 2.3 percent today.

On Monday, Santa Monica-based Activision said in an SEC filing that "it appears that actual measurement dates for certain historical stock option grants will be found to differ from the recorded grant dates for such awards." Because of this difference (which also sounds a lot like backdating) Activision CEO Robert Kotick has agreed to amend past stock options. The company says it's still investigating past option practices, but the feds are unlikely to pursue either of these cases, so both companies would seem to be in the clear. Except they really haven't told shareholders what happened.


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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
 
Mark Lacter, business writer and editor was 59
The multi-talented Mark Lacter
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