THQ faces shareholder suit (gamespot)

- gamespot -

New York law firm seeks plaintiffs for a class-action lawsuit against publisher over alleged backdating of stock options.

THQ appears set to join a growing list of publishers--including Take-Two, Activision, and Electronic Arts--being sued by their own shareholders due to a widespread stock-option scandal. A New York law firm today announced that "a shareholder lawsuit has been commenced" against some of the company's board of directors and executive officers.

When executives are granted stock options, they're given the right to buy shares in company stock at a fixed price, with the right to exercise those options over a predetermined period of time. The price is set based upon the stock's current market value at the time the options are issued. Recently, a number of corporations have come under investigation for having executives backdate their options to a time when the company's share price is very low, thus maximizing their value when sold off.

The firm, Stull, Stull & Brody, said it is investigating more than 50 companies for backdating stock options. Previously, it has released similar announcements against Nvidia, Hot Topic, and Bed, Bath and Beyond, among others.

As of press time, a THQ representative had not returned a request for comment.