Activision Blizzard CEO Bobby Kotick attends the Allen & Company Sun Valley Conference on July 8, 2022 in Sun Valley, Idaho.
Kevin Deitch | Getty Images News | Getty Images
Video game developer Activision Blizzard The Securities and Exchange Commission said the company agreed to pay $35 million in restitution over allegations it failed to follow “adequate” procedures for reporting workplace harassment and violated federal whistleblower protection rules.
The SEC alleged that workplace misconduct complaints were not collected and analyzed as expected under public disclosure rules. “Furthermore, taking steps to prevent former employees from communicating directly with Commission staff about possible securities law violations is not only bad corporate governance, but illegal,” said SEC Director Jason Burt.
The settlement does not admit or deny wrongdoing, but ends an investigation that focused on Activision Blizzard’s standards from 2018 to 2021.
Activision Blizzard CEO Bobby Kotick was aware of reports of alleged sexual misconduct at the company, including alleged rape, the Journal reported in 2021.
“Mr. Kotick was not informed of every report of misconduct at every Activision Blizzard company, and it was unreasonable to expect him to be aware of all personnel matters,” an Activision Blizzard spokesperson said at the time.
The SEC filing alleged that Activision Blizzard requires a “significant number” of departing employees who have signed separation agreements to notify Activision Blizzard when regulators attempt to contact them, or even if those employees wish to file a complaint on their own. Activision Blizzard’s requirement that former employees report to the company violated federal whistleblower protections, the SEC said.
The SEC’s order does not directly mention Kotick or the allegations of sexual harassment by some employees. Activision Blizzard has been under investigation by the SEC since 2021 over its handling of sexual and personal harassment, the Wall Street Journal previously reported.
From 2020 to 2022, Activision took steps to improve its employee grievance procedures, the SEC filing said.
“As acknowledged in the order, we have improved our disclosure processes for workplace reporting and updated the wording of the separation agreement,” an Activision Blizzard spokesperson said Friday.
In March 2022, the company settled an $18 million investigation by the Equal Employment Opportunity Commission into claims of retaliation for sexual harassment allegations.
In December 2022, the Federal Trade Commission moved to block Microsoft acquisition of Activision, which was announced in January of that year, claiming the deal would violate federal antitrust laws.
