NEW YORK (FORTUNE) - Cut! That's what you want to yell when you look at videogame maker Take-Two Interactive.

The maker of the famous, or infamous, Grand Theft Auto series has a past that's as lurid as one of its games, including accounting restatements, a $7.5 million settlement with the SEC in which the company neither admitted nor denied wrongdoing, and founder Ryan Brant being barred from serving as an officer or director of a public company for five years. (Check it out.)

And then, of course, there's last summer's real life episode of GTA, where the game was abruptly pulled from the shelves of retailers around the country after the industry board discovered hidden sex scenes.

None of that has changed certain investors' infatuation with Take-Two (Research). In fact, "Take!" seems to be their mantra. As of their last filings, Fidelity and Oppenheimer owned a combined 40 percent of the shares outstanding; the Motley Fool has long been bullish on the stock. Oppenheimer alone owns 26 percent, which is held across a number of different funds. Talk about a firm belief!

But lately, that buy-no-matter-what mentality has failed its supporters. First, Take-Two chopped its outlook, saying that results would be "significantly" below earlier forecasts, and announced that its chief operating officer had resigned. ("We view the setback as temporary," said an Oppenheimer official.)

Then, on January 18, the company said that it had found "material weaknesses" in its financial reporting, and requested more time to file its annual report. And finally, board member -- and audit committee chair -- Barbara Kaczynski resigned on January 19. As is now required under Sarbanes-Oxley, her lawyer's letter explaining the reasons for her departure was filed with the SEC yesterday.

The letter is an eyeopener. Kaczynski, the former CFO of the NFL, joined Take-Two's board in 2004 and lasted just over 16 months. In the letter, her lawyer outlines "several matters" that caused her "concern," including "Take Two's discovery of illicit images in its 'Grand Theft Auto' videogame, the Federal Trade Commission's investigation of Take-Two following that discovery, and various SEC inquiries directed at Take-Two and its employees."

The letter goes on to note that, "more recently, in connection with preparation of the 10-K and its late filing, Ms. Kaczynski's concerns have risen significantly because of what she views as an increasingly unhealthy relationship between senior management and the board of directors.

In her experience, management's interactions with the board were characterized by a lack of cooperation and respect. Moreover, Ms. Kaczynski felt that management failed to keep the board informed of important issues facing the company or failed to do so in a timely fashion. In these circumstances, Ms. Kaczynski decided to resign her position as a member of the board."

A Take Two spokesperson said, "Ms. Kaczynski's comments are her own personal views, and we do not believe they are shared by other members of the board." Oppenheimer was not immediately available to comment, and Fidelity does not comment on specific stocks.

And here's another weird thing. Kaczynski's lawyer, Bruce Baird, was recently named one of the top criminal defense lawyers by the Washingtonian. His specialties are listed in the Best Lawyers in America as "white collar criminal defense, corporate governance and compliance and commercial litigation." Asks one long-time Take Two skeptic, "Why not just hire an employment attorney?"

Wrote analyst Gary Cooper of Bank of America: "We interpret these comments to be very negative for the company and investors. We think these comments suggest a less-than-controlled governance environment."

In response to a bit of additional news that Robert Flug was appointed Take-Two's interim chairman, Cooper wrote: "Richard Rodel, the former Chairman, apparently vacated his position sometime in June 2005. We were unaware that the company did not have a chairman for the last 6 months. We question who is in charge at the company." Good question!

Last summer, before the Grand Theft Auto imbroglio, Take-Two's stock was selling for almost $30 a share. Today, it is barely more than half that. Maybe bad behavior does have a price after all. But unfortunately for those individual investors who own Oppenheimer and Fidelity mutual funds, guess who's paying that price?