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Take-Two Subpoena-ed Over 'Hot Coffee'

Take-Two Subpoena-ed Over 'Hot Coffee'

June 26, 2006 | By Simon Carless

June 26, 2006 | By Simon Carless
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Major game publisher Take-Two Interactive has announced that it has received grand jury subpoenas issued by the District Attorney of the County of New York over the 'Hot Coffee' incident involving a sex-related mini-game within Grand Theft Auto: San Andreas.

According to a statement by Take-Two, the subpoenas are requesting "production of documents, covering various periods beginning on October 1, 2001, including those relating to: the knowledge of the Company's officers and directors regarding the creation, inclusion and programming of hidden scenes (commonly referred to as "hot coffee") in Grand Theft Auto: San Andreas, the submission of Grand Theft Auto: San Andreas to the Entertainment Software Rating Board for a rating, and the Company's disclosures regarding Hot Coffee."

The statement continues: "These include disclosures and presentations by the Company of certain events, including acquisitions, partnering arrangements and earnings results; invoices from, payments to, and termination of PricewaterhouseCoopers LLP and retention of Ernst & Young LLP; acquisitions by the Company in 2005; certain compensation and human resources documents with respect to the Company and certain of its current and former officers and directors; and documents concerning the activities of the Company's Board of Directors and Committees thereof."

According to Take-Two: "The Company has not been advised that it or any specific individual is presently a target of the investigation. The Company is fully cooperating and providing the requested documents."

Take-Two and subsidiary Rockstar has previously been the subject of multiple investigations and attempted lawsuits over the controversial 'mod', apparently a section of GTA: San Andreas that was removed from regular play but unlockable through changing the in-game code. Most recently, the firm settled with the FTC over the matter - however, the final settlement in that case was not a major blow for the company, since it only levies a possible $11,000 fine per infraction for future 'Hot Coffee'-style incidents.

Nonetheless, the subpoena announcement, relating to specific charges and allegations which are yet to be explicitly revealed, had a major effect on Take-Two stock - it was down almost 20% to $10.30 in after-hours trading on NASDAQ.


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