Activision Blizzard Fined $35 Million For Lack of Workplace Misconduct Procedures

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The US Securities and Exchange Commission (SEC) has fined publisher Activision Blizzard $35 million for failing to create a system that could address complaints of workplace misconduct. The regulator also found that the company violated a whistleblower protection rule. Activision Blizzard has agreed to pay the fine to settle the charges.

Activision Blizzard impeded former employees from speaking with the SEC

The SEC found that, between 2018 and 2021, Activision Blizzard did not have the proper controls and procedures in place to properly address employee complaints of workplace misconduct. Consequently, the company “lacked sufficient information to understand the volume and substance” of these complaints.

It also discovered that the company, from 2016 to 2021, required former employees to tell them if they had received a request of information from the SEC, in violation of a law meant to protect whistleblowers. Jason Burt, Director of the SEC’s Denver Regional Office, clarifies that impeding former employees from communicating with the SEC “is not only bad corporate governance, it is illegal.”

A report by the Wall Street Journal in November 2021 said that CEO Bobby Kotick knew about sexual assault and abuse allegations at the company, but hid them from investors. In July 2021, the California Department of Fair Employment and Housing also filed a lawsuit against Activision Blizzard for discrimination and sexual harassment.

The $35 million fine is a large sum, but it’s a rather small drop in the bucket considering that Activision Blizzard had a net revenue of $1.78 billion in just Q3 2022 alone according to its latest financial results. Microsoft and Activision Blizzard also received a formal letter of objections from the EU against their proposed merger.

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