Activision Blizzard Inc has come to an agreement to pay a sum of $35 million to resolve accusations from the US Securities and Exchange Commission that it failed to establish proper procedures for disclosing employee complaints and violated whistleblower protection regulations, as stated by the regulator on Friday.
The SEC stated that although the company was aware that employee retention was a significant risk in their business, they did not implement sufficient measures to handle workplace misconduct complaints across their business units from 2018 to 2021.
According to Jason Burt, head of SEC’s Denver office, Activision Blizzard neglected to establish the required controls for collecting and examining employee complaints about workplace misconduct. This caused the company to be unable to determine if there were larger issues that should have been disclosed to investors.
The company, which created the popular “Call of Duty” game, also allegedly instructed employees from 2016 to 2021 to inform the company if the SEC sought information from them, a violation of whistleblower protection regulations.
Although Activision Blizzard did not admit or deny the SEC’s allegations, the company stated in a statement that they were “pleased to have amicably resolved this matter” and had improved their workplace reporting procedures and language in contracts.
The SEC noted that the company made improvements to the way complaints were gathered and communicated to senior managers from May 2020 to May 2022.
A California-based firm, with its headquarters in Santa Monica, reached a resolution with the U.S. Equal Employment Opportunity Commission over a lawsuit alleging sex discrimination on a large scale.
To tackle the accusations of sexual harassment and other forms of misconduct, the company terminated several employees. The board stated that there was no proof to support the claim that senior executives purposely overlooked and attempted to minimize these issues.
Microsoft Corporation, the maker of Xbox, attempted to purchase Activision Blizzard for $69 billion, but the Federal Trade Commission requested the transaction to be blocked by a judge in December. The deal is also being evaluated by the European Union authorities.
Due to a widespread sell-off on Wall Street, the shares of Activision Blizzard decreased by 1.8% by 12:35 PM Eastern Standard Time.