- Activision Blizzard will settle with the SEC for $35 million over claims that the company violated federal whistleblower protections and failed to maintain adequate disclosure standards.
- Settlement is not an admission or denial of wrongdoing.
- According to the Wall Street Journal, CEO Bobby Kotick and other senior executives were aware of significant harassment issues within Activision, including instances of alleged sexual misconduct.
video game developer activism blizzard agreed to pay $35 million on charges of failing to maintain “adequate” controls for collecting and evaluating reports of workplace misconduct and violating federal whistleblower protection rules, Securities and Exchange Commission Said Friday.
The SEC claimed that complaints of workplace misconduct were neither collected nor analyzed as required by public disclosure rules. “Furthermore, taking action to deter employees prior to communicating directly with Commission staff about potential securities law violations is not only bad corporate governance, it is illegal,” said SEC Director Jason Burt.
The settlement is not an admission or denial of wrongdoing, but the conclusion of an investigation that focused on Activision Blizzard’s standards from 2018 to 2021.
Activision Blizzard CEO Bobby Kotick was aware of reports of alleged sexual misconduct at the company, including alleged rapeThe Wall Street Journal reported In 2021.
An Activision Blizzard spokesperson said at the time, “Mr. Kotick would not have been informed of every report of misconduct at every Activision Blizzard company, nor could he reasonably be expected to be updated on all personnel issues. “
The SEC filing claimed that Activision Blizzard required “a significant number” of departing employees who signed separation agreements to tell Activision Blizzard whether regulators tried to contact them, or even Only those employees want to make their own complaint. The SEC claimed that Activision Blizzard required that former employees disclose federal whistleblower protections to the company.
The SEC noted that it was not aware of “any specific instance” where an employee was prevented from making a complaint or speaking to regulators.
The SEC’s order did not explicitly mention Kotick’s or sexual harassment claims by some employees. Activision Blizzard was under SEC scrutiny for the company’s handling of sexual and personal harassment through 2021, The Journal previously informed of,
“When the company received the complaints, we responded appropriately and after a comprehensive and thorough review of workplace policies and procedures, workplace practices, compliance, and company data by an array of outside company consultants, including former EEOC Chair Gilbert Casellas, Skadden Arps Responding to company data executed by Wilmarhale, Paul Hastings & CDF Labor Law LLP, the board concluded that there was never widespread or systemic harassment, retaliation or discrimination at the company,” said an Activision Blizzard spokesperson. “The board and consultants also concluded that there was no evidence that senior company executives ignored the complaints when they were reported.”
Activision Takes Steps 2020 to 2022 to Enhance Processes for Handling Employee Grievances SEC order noted,
“As the order recognizes, we have enhanced our disclosure procedures with respect to workplace reporting and updated our separation agreement language,” an Activision Blizzard spokesperson said Friday.
The company settled an Equal Employment Opportunity Commission investigation in March for $18 million over related claims of retaliation in connection with sexual harassment claims.
In December, the Federal Trade Commission moved to block Microsoft’s the acquisition of Activision, which was announced in January 2022, amid claims that the deal would violate federal antitrust laws.
Correction: The SEC settled with Activision Blizzard over its failure to maintain “adequate” controls to assess reports of workplace misconduct, not harassment, the SEC said.
Credit: www.cnbc.com /