SANTA MONICA—On Friday, February 3, the Securities and Exchange Commission announced that the Santa Monica-based game developing company, Activision Blizzard, has agreed to pay $35 million to settle charges that it failed to maintain controls to collect and assess workplace complaints with regard to disclosure requirements and violated a federal whistleblower protection rule. The company has not admitted or denied the commission’s findings and agreed to a cease-and-desist order.
Jason Burt, the director of the SEC’s Denver office, said in a statement that the lack of necessary controls left Activision “without the means to determine whether larger issues existed that needed to be disclosed to investors. 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.”
This announcement comes after the company settled with U.S. workplace regulators in 2021 over employee complaints about sexual harassment. Their employees accused Activision of retaliation against workers who spoke out by firing them and discriminating against workers who were pregnant.
California’s civil rights agency sued Activision in July 2021, stating that the company’s culture was a “breeding ground for harassment and discrimination against women.” A month later the president of the company, J. Allen Brack, stepped down.
In this latest settlement, the company agreed to compensate those who experienced discrimination and sexual harassment out of an $18 million fund. Monies left over are to be distributed to gender equity measures like charities for women in the video game industry.
Activision also agreed to strengthen its policies and training on harassment and discrimination and hire an independent consultant to oversee its compliance with the U.S. Equal Employment Opportunity Commission’s conditions.
Activision was behind the creation of many popular games including Candy Crush, Call of Duty, Overwatch and World of Warcraft. The game developer’s shares fell about 1.5 percent, to $76 after the SEC made its announcement.