THQ announced yesterday that the SEC has launched an "informal" investigation by requesting documents and information related to company options grants from 1996 to present. What the crap is an options grant, you ask? The Street writes: "Employee stock options typically grant insiders the right to buy their company's stock at a price equal to the market price of the stock on the day the options are granted. But with backdated options, companies are alleged to have assigned to the options a strike price equal to the market price on a date days or weeks before the grant date, which was known at the time of the grant to be a short-term low in the company's stock."So basically, through the use of backdating, a company can fudge the numbers. In addition to THQ, both Activision and Take-Two are being scrutinized the by the SEC regarding options grants, to which all three companies collectively stated, "Don't hate tha playa, hate the game.*"
*Note: They didn't really say this.
