Video game development and publishing company Activision Blizzard [ATVI:US] agreed to pay USD35m to settle charges of failing to have systems in place to properly handle disclosures of employee complaints and violating whistleblower protection rules, according to the US Securities and Exchange Commission (SEC) website, as reported by Reuters on February 4. The SEC found that between 2018 and 2021, the company had been aware that it lacked controls and procedures needed to collect and review workplace misconduct complaints from its various business units. In response, the company made improvements between May 2020 and May 2022 that enhanced the collection of complaints and communication with senior managers, according to SEC documents.
The SEC found that Activision Blizzard violated whistleblower protection rules by signing separation agreements with departing employees that required them to inform the company if they received any requests for information from the regulators. Jason Burt, director of the SEC’s Denver regional office, stated that impeding former employees from communicating directly with the commission staff about potential securities law violation is illegal and represents poor corporate governance. Burt added that Blizzard’s lack of proper controls to collect and review employee complaints about workplace misconduct also hindered their ability to identify and disclose larger issues to investors. In April 2022, Activision Blizzard also paid USD18m for a settlement with the Equal Employment Opportunity Commission (EEOC), a federal agency supervising civil rights issues in workplaces, to resolve workplace sexual harassment, pregnancy discrimination and retaliation claims.