Former Counsel of Video Game Maker Gets Law License
Suspended
August 3, 2009 (PLANSPONSOR.com) - A New York state
appellate court has suspended for three years the Empire
State law license of the former general counsel of a New York
video games maker in connection with backdating stock
options.
A New York Law Journal report said the penalty was
handed down against Kenneth Selterman in connection with
stock-option backdating activities at Take-Two
Interactive Software where Selterman served as general
counsel from 1999 to 2007. The company makes the popular
"Grand Theft Auto" game series.
The Law Journal report said a lawyer disciplinary
committee had recommended a one-year license suspension
for Selterman, but the court opted for a more severe
penalty in light of his position, "level of
sophistication and legal experience and his apparent lack
of remorse."
Both Selterman and Take-Two's former chief
executive officer, Ryan A. Brant, pleaded guilty to
charges stemming from a 2002 NASDAQ investigation of
stock backdating. In mid-2007, Selterman pleaded guilty
to a misdemeanor charge of falsifying business records,
agreed to pay a $50,000 fine, and was sentenced to three
years probation (see
Take-Two General Counsel Sentenced in Options Backdating
Case
).
At the time of his sentencing, Selterman
acknowledged sending a letter containing "false
information" to NASDAQ in response to an inquiry about
the company's stock option plans.
Selterman stated that he then drafted a letter on
March 14 to NASDAQ to correct the information in the
first letter, but Brant asked him not to send it, saying,
according to the decision, that would not be in "the best
interests of the company." According to the news report,
Selterman agreed to that request and never corrected the
false information.
The five-judge Appellate Division panel asserted
that Selterman's "inconsistent testimony about his
culpability of the intentional fraud should have been
construed as a lack of remorse…."
Fred Schneyer
editors@plansponsor.com