Activision Blizzardhas been ordered to pay $35 million by the Securities and Exchange Commission for failing to maintain disclosure controls pertaining to complaints of workplace misconduct. The video game development company also settled charges that it violated an SEC whistleblower protection rule.
The settlement with the Securities and Exchange Commission that sees Activision Blizzard pay $35 million is due to the company failing to implement necessary controls to collect and review employee complaints about workplace misconduct. Activision Blizzard agreed to pay the penalty without admitting or denying the SEC’s claims that it violated a Commission whistleblower protection rule. The SEC revealed that Activision Blizzard settled charges by requiring former employees to provide notice to the company if they have received a request for information from the Commission before.
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“The SEC’s order finds that Activision Blizzard failed to implement necessary controls to collect and review employee complaints about workplace misconduct, which left it without the means to determine whether larger issues existed that needed to be disclosed to investors,” The Securities and Exchange Commission elaborated on its findingsvia an official press release. It then explained the other violation pertaining to the SEC whistleblower protection rule, saying: “Moreover, taking action to impede former employees from communicating directly with the Commission staff about a possible securities law violation is not only bad corporate governance, it is illegal.”
The SEC filing claimed that Activision Blizzard was aware that its ability to attract and retain employees was an important risk in business between 2018 and 2021. However, the company lacked controls and procedures among its separate business complaints of workplace misconduct. It was also said that the settlement with the SEC is not a denial or admission of wrongdoing.
To summarize, Activision Blizzard settled charges that it lacked sufficient information to maintain disclosure controls pertaining to employee complaints of workplace misconduct. The SEC has determined that it also violated another Exchange Act Rule by taking action to prevent former employees from communicating with the Commission staff. As a result of an investigation conducted by the SEC, Activision Blizzard will pay a $35 million penalty for its wrongdoings.
