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Activision Blizzard Agrees to $35M Fine in SEC Settlement

Activision Blizzard ("Activision") continues to pay for issues arising out of misconduct and sexual harassment claims, as is reflected in its recent Security and Exchange Commission ("SEC") settlement. The California Civil Rights Department (formerly Department of Fair Employment and Housing) filed a lawsuit against Activision in 2021, while the U.S. Equal Employment Opportunity Commission settled its Activision lawsuit for $18 million. The SEC investigation did not focus its investigation on the alleged sexual harassment and misconduct but rather on how the company "collects, analyzes, and discloses reports of those issues, and about the company's separation agreements."

The SEC believes Activision failed to "maintain disclosure controls and procedures to ensure that the company could assess whether its disclosures pertaining to its workforce were adequate." The second violation relates to SEC protections for whistleblowers to report issues free from retaliation. For the first part, Activision agreed to gather information correctly and accurately to make required investor disclosures. In the past, Activision did not have enough information to assess the number and severity of the workplace complaints. As such, investors also did not have enough information to determine risks to the company. Regarding whistleblower protections, the company may not use confidentiality agreements to stop employees from reporting concerns to the SEC. From 2016 to 2021, Activision agreements only allowed reports from departing employees if they told Activision first, and then the company could "take all steps it deems appropriate to prevent or limit the required disclosure."

Activision did not admit liability in its settlement, saying it enhanced its processes for workplace reporting and updated its separation agreement as part of a continuing commitment to “operational excellence.” The company had ten days to pay the settlement.