Activision Blizzard has agreed to pay a $35 million settlement to the Securities and Exchange Commission over allegations that it failed to maintain “adequate” workplace harassment reporting procedures and violated federal whistleblower protection rules.
The SEC claimed that workplace misconduct complaints were not collected or analysed as required by public disclosure regulations. “Moreover, taking action to prevent former employees from communicating directly with Commission staff about a potential securities law violation is not only bad corporate governance, but it is illegal,” said SEC director Jason Burt.
The agreement does not constitute an admission or denial of wrongdoing, but rather concludes an investigation that focused on Activision Blizzard’s standards from 2018 to 2021.
According to the Wall Street Journal in 2021, Activision Blizzard CEO Bobby Kotick was aware of reports of alleged sexual misconduct at the company, including alleged rape.
“Mr. Kotick would not have been reasonably expected to have been informed of every report of misconduct at every Activision Blizzard company,” an Activision Blizzard spokesperson said at the time.
According to the SEC filing, Activision Blizzard required “a significant number” of departing employees who signed separation agreements to notify Activision Blizzard if regulators attempted to contact them, or if those employees wished to file their own complaint. The SEC claimed that Activision Blizzard’s requirement that ex-employees notify the company violated federal whistleblower protections.
The SEC order made no mention of Kotick or sexual harassment claims made by some employees. Since 2021, Activision Blizzard has been under SEC investigation for its handling of sexual and personal harassment, according to the Wall Street Journal.
According to the SEC order, Activision took steps from 2020 to 2022 to improve procedures for handling employee complaints.
“As the order recognises, we have improved our workplace reporting disclosure processes and updated our separation contract language,” an Activision Blizzard spokesperson said on Friday.
In March 2022, the company paid $18 million to settle an Equal Employment Opportunity Commission investigation into retaliation in connection with sexual harassment claims.
The Federal Trade Commission moved to block Microsoft’s acquisition of Activision, announced in January of that year, in December 2022, claiming that the deal would violate federal antitrust laws.