Take-Two Interactive, one of several publishers that have been investigating stock-option grants, today announced that its Special Committee of its Board of Directors found that there were indeed "improprieties in the process of granting and documenting stock options and that incorrect measurement dates for certain stock option grants were used for financial accounting purposes."

The committee, comprised of three independent members of Take-Two's Board of Directors and assisted by outside legal counsel Kasowitz, Benson, Torres & Friedman LLP and independent accountants BDO Seidman, LLP, reviewed documents and emails, interviews of current and former officers, directors, employees and advisors to Take-Two. No misconduct was found by current Executive Officers, including Paul Eibeler, Take-Two's Chief Executive Officer and President, and Karl Winters, Take-Two's Chief Financial Officer.

However, the Board of Directors and management have concluded that Take-Two will need "to restate historical financial statements to record non-cash charges for compensation expense relating to past stock option grants." Furthermore, "Although the amount of such charges and the resulting tax and accounting impact has not yet been determined, all consolidated financial statements, earnings releases and similar communications issued by the Company containing financial information for periods beginning 1997 through April 30, 2006 should no longer be relied upon. Any non-cash stock-based compensation expense recorded will not affect the Company's previously reported cash positions or revenues."

A final report by the Special Committee, detailing findings and recommendations for remedial actions, is still pending.

This news comes only two months after Take-Two founder Ryan Brant resigned from the company. Brant had been serving in a non-executive capacity at the time, but when he originally stepped away from his post as Chairman Take-Two was being investigated for tampering with stock prices and accounting. The SEC had found that the publisher had artificially boosted its revenues, and the settlement cost Take-Two $7.5 million.

Take-Two today also mentioned that its 10-Q filing for the third quarter ended July 31 has been delayed due to the ongoing stock options investigation. Although the company is not in compliance with Nasdaq, its shares (TTWO) will remain listed on the Nasdaq Global Select Market pending a decision by the Nasdaq Listing Qualifications Panel on the company's request.