Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (39949)	7/20/2003 11:18:53 PM
From: Johnny Canuck	Read Replies (1) \| Respond to of 69301

SEC launches probe of video game industry By Reuters July 20, 2003, 12:45 PM PT Three video game publishers say they are part of an apparently wide-ranging probe opened by the U.S. Securities and Exchange Commission into the game industry. Acclaim Entertainment, Activision and THQ said Friday they had received requests for information from the SEC with regard to a formal investigation into video game manufacturers and distributors. Acclaim, in an SEC filing, said it was notified of the probe on July 11. Activision, in its SEC filing, did not say when it was notified. "The investigation appears to be focused on certain accounting practices common to the interactive entertainment industry, with specific emphasis on revenue recognition," Activision said in its filing. "The SEC has advised Activision that this request for information should not be construed as an indication from the SEC or its staff that any violation of the law has occurred, nor should it reflect negatively on any person, entity or security," Activision said. Both companies said they are cooperating fully with the probe. An Acclaim spokesman declined further comment, while an Activision spokeswoman was not immediately available for comment. Nancy Grunberg, a partner at the Washington, D.C.-law firm of Venable and a former enforcement official at the SEC, said an industrywide investigation would represent an unusually wide scope for a regulatory probe. "I'm not sure I know of an example of where they launched an investigation of an entire industry like this," Grunberg said. "That does sound a little unusual to me, except for the example of the analysts for the major broker-dealers." Activision shares fell sharply in after-hours trade, slipping to $11.25 from a Nasdaq close of $12.46. Acclaim stock was off slightly to 67 cents in after-hours trade from a Nasdaq close of 68 cents. "I think the SEC is very likely trying to understand what industry practices are and see if these guys have the potential to manipulate earnings," analyst Michael Pachter of Wedbush Morgan Securities said. A spokesman for Take-Two Interactive Software, which is already under formal SEC investigation related to past accounting issues involving revenue recognition, was not immediately available for comment. "As a matter of policy we do not comment on SEC issues outside of our earnings calls and statutory filings," said Jeff Brown, spokesman for Electronic Arts. "If there is a material event we make appropriate disclosures." A spokeswoman for TDK Mediactive said the company was aware of the probe but has not been contacted by the SEC regarding it. A spokeswoman for Atari was not aware of the investigation and could not comment. An SEC spokesman declined to comment on the investigation.