According to the SEC order, in regulatory filings submitted between 2018 and 2021, Activision Blizzard “acknowledged that attracting, retaining, and motivating a workforce of employees with specialized skills is particularly important to its business.” Over this timeframe, however, Activision Blizzard “lacked controls and procedures designed to ensure that information related to employee complaints of workplace misconduct would be communicated to Activision Blizzard’s disclosure personnel to allow for timely assessment on its disclosures,” the order stated.
Separately, from 2016 through 2021, Activision Blizzard, in the ordinary course of its business, entered a “significant number of separation agreements using templates that required former employees to notify the company if they received a request from a government administrative agency in connection with a report or complaint,” the SEC order stated.
“The SEC’s order finds that Activision Blizzard failed to implement necessary controls to collect and review employee complaints about workplace misconduct, which left it without the means to determine whether larger issues existed that needed to be disclosed to investors,” said Jason Burt, Director of the SEC’s Denver Regional Office. “Moreover, taking action to impede former employees from communicating directly with the Commission staff about a possible securities law violation is not only bad corporate governance, it is illegal.”
Activision Blizzard did not admit or deny the SEC’s findings.
The company has been plagued over the last two years with allegations of systemic sexual harassment, pregnancy discrimination, and retaliation. In September 2021, it reached an $18 million settlement with the Equal Employment Opportunity Commission (EEOC) to resolve allegations that its employees faced “severe or pervasive” sexual harassment, and that Activision Blizzard “failed to take corrective and preventative measures” upon receiving reports of sexual harassment, according to the EEOC’s initial complaint.
Additionally, Activision Blizzard’s $69 billion merger with Microsoft remains under regulatory scrutiny. Currently, the deal is being investigated by the European Commission for anti-competition concerns.
“We continue to work cooperatively with regulators in other jurisdictions,” said CEO Bobby Kotick, adding that he expects the deal will close in Microsoft’s current fiscal year ending June 2023. 
Jaclyn Jaeger is a contributing editor at Compliance Chief 360° and a freelance business writer based in Manchester, New Hampshire.