Key Points:
- Without admitting or denying the SEC’s findings, Activision Blizzard agreed to a cease-and-desist order and to pay a $35 million penalty.
- Activision Blizzard was aware that its ability to attract, retain, and motivate employees was a particularly important risk in its business.
Activision Blizzard has agreed to pay a $35 million fine to the Securities and Exchange Commission for failing to maintain disclosure controls and whistleblower violations stemming from the allegations of workplace misbehavior.
According to the SEC, the video game publisher was aware that employee retention was a particularly important risk in its business, yet did not have proper controls in place to assess and resolve workplace misconduct concerns between 2018 and 2021.
The company’s management lacked adequate information to comprehend the frequency and nature of employee complaints about workplace wrongdoing, and they failed to determine whether any material issues existed that would have necessitated public disclosure.
Separately, the SEC’s ruling alleges that, between 2016 and 2021, Activision Blizzard entered into separation agreements that violated a Commission whistleblower protection regulation by forcing former workers to notify the firm if they received a request for information from the Commission’s staff.
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. 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.
said Jason Burt, Director of the SEC’s Denver Regional Office
Activision Blizzard paid the fine without admitting or denying the commission’s findings.
Activision Daniel Alegre, Blizzard’s former chief operating officer, is slated to take over Bored Ape Yacht Club creator Yuga Labs. He had been the COO since April 2020.
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