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THQ investigated over "false and misleading" uDraw demand

THQ investigated over "false and misleading" uDraw demand

Thu 14 Jun 2012 8:59am GMT / 4:59am EDT / 1:59am PDT
LegalPublishing

Law firm says publisher may have violated federal securities laws

THQ is being investigated by a US law firm as to whether it mislead investors over demand for the uDraw tablet.

Holzer, Holzer & Fistel is investigating potential violations of federal securities laws, specifically statements made between May 3 2011 and May 3 2012 that may have been "false and misleading" over expected demand for the tablet.

"On February 3, 2012, THQ announced it would no longer manufacture or sell the uDraw GameTablet," noted the law firm. "The company previously pointed to expansion of the uDraw GameTablet to the Xbox360 and PlayStation platforms as a source of expected revenue growth."

It's the latest problem for the beleaguered publisher, which is currently downsizing by axing staff, trimming its portfolio and closing studios.

7 Comments

Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.

2,271 2,440 1.1
Seriously? It's a violation of securities law to overestimate demand?

Posted:2 years ago

#1

Thomas Dolby Project Manager / Lead Programmer, Ai Solve

340 292 0.9
Maybe I'm missing something but I don't see anything wrong with what THQ did. They planned to expand into other markets, but because of their situation these plans had to be shelved. So investors would rather they take that plunge with all the risks involved? Being unable to predict the future accurately is now a crime it seems.

Posted:2 years ago

#2

Paul Shirley Programmers

178 150 0.8
It's a question of whether the internal risk estimate and sales projections was substantially different to what they told the investors. As long as they keep investors truthfully informed there's no problem. If they were incompetent and simply got those assessments wrong they have a different legal problem.

Presumably the ambulance chasers suspect THQ misled investors.

Posted:2 years ago

#3
Sounds like this is the beginning of Law Firms going after over hyped claims - that could see the console companies in the dock if they overstate the performance of their new releases - as well as the game publishers (interesting if Ubisoft gets stung over the 'Watch Dog' presentation!)

Posted:2 years ago

#4

Rick Lopez Illustrator, Graphic Designer

1,269 942 0.7
I dont think THQ mislead them. How could THQ anticipate this or even want to be in their current situation? I just think of this is a case were shit happens...

However my money is on Darksiders 2 and Any further iterations of Saints Row. I loved Part 3. Its a game I keep playing well after i finished it.

Im really hoping THQ can get outta this mess.

Posted:2 years ago

#5

Christopher Bowen Editor in Chief, Gaming Bus

457 734 1.6
Is THQ seriously expected to say "oh, our product is absolutely going to go into the shitter"? This isn't a violation, and frankly, this is an irresponsible announcement considering their stock problems. This is kicking a three legged dog when its down. "Ambulance chasers" is the right term.

Posted:2 years ago

#6

David Stevenson Journalist

5 0 0.0
THQ had the crappy sales totals in their database and chose not to inform investors until after the grand fromage sold off a million dollars worth of public shares.

That is fraud.

as a result, its graduated from being an "investigation" to being a "class action lawsuit".

To quote Jerry Seinfeld.. i think this is the DEATH BLOW.

Posted:2 years ago

#7

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