Activision Blizzard has reportedly agreed to pay the US Securities and Exchange Commission (SEC) a total of US $35 million to settle charges including an alleged failure to maintain adequate disclosure controls, and violation of a whistleblower protection rule in relation to employee complaints of workplace misconduct.
The SEC stated the company had broken United States law by violating these rules, and alleged it lacked the tools to adequately deal with complaints brought by employees.
‘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,’ Jason Burt, SEC Denver director 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.’
Activision Blizzard has now submitted to these charges, settling with the SEC via a significant payment. Notably, this settlement means the SEC charges will not be investigated further, and the matter will now be concluded.
‘We are pleased to have amicably resolved this matter,’ an Activision spokesperson reportedly told VGC. ‘As the order recognises, 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.’
Despite recognition for Activision Blizzard’s internal overhaul, which has reportedly included stricter rules for employees and stronger support lines for all staff, it’s likely the SEC will continue to analyse the company’s next steps closely.
Over a period of several years, Activision Blizzard has been the subject of many lawsuits, largely stemming from an alleged ‘fratboy culture‘ at the company which alienated many staff, and contributed to a toxic workplace. In recent years, Activision Blizzard has worked to correct these mistakes, however, change is a difficult beast. Whether the company will learn from these lessons – delivered by the SEC and a variety of current and former staff members – remains to be seen.