SEC imposes $35M fine on Activision Blizzard
The Securities and Exchange Commission (SEC) today announced that Activision Blizzard Inc., a video game development and publishing company, agreed to pay $35 million to settle charges that it failed to maintain disclosure controls and procedures to ensure that the company could assess whether its disclosures pertaining to its workforce were adequate.
The company also settled charges that it violated an SEC whistleblower protection rule.
According to the SEC’s order, between 2018 and 2021, Activision Blizzard was aware that its ability to attract, retain, and motivate employees was a particularly important risk in its business, but it lacked controls and procedures among its separate business units to collect and analyze employee complaints of workplace misconduct. As a result, the company’s management lacked sufficient information to understand the volume and substance of employee complaints about workplace misconduct and did not assess whether any material issues existed that would have required public disclosure.
Separately, the SEC’s order finds that, between 2016 and 2021, Activision Blizzard executed separation agreements in the ordinary course of its business that violated a Commission whistleblower protection rule by requiring former employees to provide notice to the company if they received a request for information from the Commission’s staff.
The SEC’s order finds that Activision Blizzard violated Exchange Act Rules 13a-15(a) and 21F-17(a). Without admitting or denying the SEC’s findings, Activision Blizzard agreed to a cease-and-desist order and to pay a $35 million penalty.