September 22, 2021
The Securities and Exchange Commission has launched an investigation into Activision Blizzard examining how the gaming company handled information related to workplace discrimination and sexual misconduct. Senior executives including CEO Bobby Kotick have been subpoenaed along with former and current employees. The SEC asked for Kotick’s internal communications and minutes from Activision board meetings dating from 2019. The publisher of “Call of Duty,” “World of Warcraft” and “Candy Crush” must also provide the agency with personnel files and 2021 separation agreements.
Activision has the largest market cap of any U.S. video-game publisher. The SEC’s focus is whether Activision and its leadership intentionally withheld or improperly delayed providing shareholders relevant information pertaining to workplace harassment and gender-pay disparity, according to The Wall Street Journal, which reported Monday that Activision is cooperating with the investigation.
In July, the California Department of Fair Employment and Housing (DFEH) filed suit against Activision claiming its female employees made less than male counterparts for commensurate work, providing women fewer opportunities to advance. The DFEH complaint also alleged retaliatory actions against women who spoke up and referenced a “frat-boy” culture at the Blizzard Entertainment division.
Activision called the DFEH claims “distorted, and in many cases false” and said the company plans to fight the lawsuit, according to WSJ, which reports that since May 2020 the federal Equal Employment Opportunity Commission has been investigating gender discrimination at Activision, said to be in settlement talks that could cost the company millions of dollars.
WSJ says Kotick called Activision’s initial response to the claims “tone deaf,” noting the company hired a law firm to investigate. Some of the allegations veer toward lurid. Sexual harassment “was allegedly rampant,” according to Ars Technica, which describes “blatant sexual harassment without repercussions” and specifies an incident wherein “a female employee committed suicide while on a work trip with a male supervisor, who allegedly harassed her during the trip.” At least one employee was fired and others left, as detailed by Ars Technica.
Activision issued a statement asserting “We have made and are making a number of important changes to improve our policies and procedures to ensure that there is no place anywhere in our company for discrimination, harassment or unequal treatment of any kind.”
The company, which is also fending investor lawsuits, saw its shares down about 4 percent on Monday after WSJ reported on the SEC investigation and amid a broader decline in tech stocks that has seen Activision down about 17 percent on a longer curve.