Activision Blizzard Pays $38M to Settle SEC Charges

Key insights

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Key number

Activision Blizzard agreed to a $38 million settlement with the SEC.

This settlement resolves charges related to workplace misconduct disclosures and violations of whistleblower protections.

Settlement Amount. Activision Blizzard agreed to a $38 million settlement with the U.S. Securities and Exchange Commission (SEC).

Disclosure impact

The company's inadequate procedures prevented identification of material workplace issues.

These issues should have been reported to investors, but the company was unable to determine their materiality.

Reporting Gap. The SEC determined that the company's failure to maintain adequate disclosure procedures left it unable to identify material workplace issues that should have been reported to investors.

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Summary

Activision Blizzard has reached a $38 million settlement with the U.S. Securities and Exchange Commission (SEC) to resolve charges regarding internal control failures and violations of whistleblower protection rules. The regulatory action stems from the company’s inability to maintain adequate disclosure controls and procedures between 2018 and 2021, which prevented the organization from effectively collecting, analyzing, and assessing the significance of employee complaints concerning workplace misconduct.

The SEC investigation concluded that these systemic failures left the company without the necessary mechanisms to determine whether workplace issues were material enough to warrant public disclosure to investors. Furthermore, the settlement addresses illegal practices involving separation agreements, where the company required departing employees to disclose whether they had communicated with the SEC regarding potential securities law violations.

As part of the resolution, Activision Blizzard has agreed to pay the $38 million fine and comply with a cease-and-desist order to halt these restrictive practices. The SEC emphasized that impeding former employees from reporting potential violations to federal regulators constitutes a significant breach of corporate governance. This enforcement action highlights the critical importance of maintaining robust internal reporting structures and ensuring that corporate policies do not interfere with the regulatory oversight of publicly traded entities.