Activision Blizzard Pays $38M to Settle SEC Charges

Credit: SEC

Call of Duty and Overwatch 2 maker Activision Blizzard has agreed to pay $35M USD to settle charges by the U.S. Securities and Exchange Commission (SEC) for failing to “maintain disclosure controls and procedures to ensure that the company could assess whether its disclosures pertaining to its workforce were adequate” and separately, for violating SEC whistleblower protection rules.

The SEC said in a release Friday that between the 2018 and 2021, Activision Blizzard lacked procedures to properly collect and analyze employee complaints related to workplace misconduct and as a result failed to recognize the scale and scope of serious issues inside its various studios. Because it lacked these controls iot “did not assess whether any material issues existed that would have required public disclosure,” according to the SEC.
The SEC also found that Activision Blizzard violated SEC whistleblower rules because it required employees who were leaving the company and signing separation agreements to disclose whether they had communication with the SEC.

In addition to paying the $38M fine, Activision Blizzard agreed to halt these practices (or to comply with a cease-and-desist order).

“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,” said Jason Burt, Director of the SEC’s Denver Regional Office. “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.”