Supporting actors can be just as vital to the success of a corporate fraud as they are to a film. So it’s no surprise that they’re attracting a lot of attention these days.
Earlier this month the Securities and Exchange Commission settled aiding-and-abetting charges against a distributor for videogame maker Take Two Interactive Software for its role in helping Take Two book sham transactions to boost revenue figures. The SEC charged Capitol Distributing and one of its owners, Terry Phillips, for their roles in a scheme earlier this decade where Take Two shipped hundreds of thousands of videogames to Capitol, usually at the end of reporting periods. While Take Two booked the shipments as revenue, Capitol only held the games a short while and then returned them. Phillips admitted to violations of the antifraud, reporting, and recordkeeping provisions of the federal securities laws.
