LogInThe company has agreed to pay the penalty to settle the US Securities and Exchange Commission's charges of misconduct and violating the whistleblower protection rule.
Activision Blizzard has been ordered to pay $35 million by the US Securities and Exchange Commission to settle charges including the claimed lack of sufficient disclosure controls and a violation of the whistleblower protection rule in connection to workplace misconduct complaints made by employees.
The SEC claimed that the company broke US law by breaking these rules and claimed it lacked the proper means to effectively handle employee complaints.
"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 Director of the SEC’s Denver Regional Office Jason Burt said in a press release.
"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 initiated an investigation into Activision Blizzard's management of allegations of sexual misconduct and discrimination in September 2021, which resulted in subpoenas being issued to members of the company's leadership, including CEO Bobby Kotick.
According to the press release, Activision Blizzard now consented to pay the penalty without acknowledging or denying the SEC's allegations. This settlement signifies that the SEC charges will no longer be investigated and that the issue has now been resolved.
"We are pleased to have amicably resolved this matter. As the order recognizes, we have enhanced our disclosure processes with regard to workplace reporting and updated our separation contract language. We did so as part of our continuing commitment to operational excellence and transparency. Activision Blizzard is confident in its workplace disclosures," an Activision spokesperson reportedly told VGC.
Even though Activision Blizzard has undergone internal reforms, which are said to comprise stricter employee guidelines and enhanced support for all staff, it is probable that the SEC will closely monitor the company's future actions.
Over the recent years, Activision Blizzard has faced numerous legal disputes, largely arising from claims of a "frat boy" workplace culture that led to a toxic work environment. Most recently, Activision Blizzard has attempted to address these issues. However, it remains to be seen whether the company will take lessons from the SEC and various current and former employees and make necessary improvements.
You can find the SEC's press release here. Also, don't forget to join our 80 Level Talent platform, our Reddit page, and our Telegram channel, follow us on Instagram and Twitter, where we share breakdowns, the latest news, awesome artworks, and more.