Shareholder sues Activision Blizzard for allegedly hiding harassment probe

The suit alleges Bobby Kotick "recklessly disregarded the fact that false and misleading statements were being issued"

Activision Blizzard is being sued by an investor for allegedly hiding the severity of an investigation into sexual harassment, which led to a lawsuit from the state of California.

An Activision Blizzard investor has filed a federal securities fraud claim against the company, stating shareholders were “economically damaged” after Activision Blizzard reportedly downplayed and buried California’s investigation into sexual harassment from investors.

The suit, noted by Bloomberg Law, alleges that Activision Blizzard made “materially false and/or misleading” statements by using language that downplayed the severity of the sexual harassment probe.

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The language in question refers to a document that Activision Blizzard sent to investors in February 2021, claiming “we are party to routine claims, suits, investigations, audits and other proceedings arising in the ordinary course of business.”

Activision Blizzard CEO Bobby Kotick
Credit Getty Images/
Drew Angerer

The document further stated “we do not expect them to have a material adverse effect on our business, financial condition, results of operations, or liquidity.”

The “routine” investigation mentioned actually resulted in a sexual harassment suit from the state of California, which has caused staff walkouts, falling stock price, and development halts.

The company also stated in a press release that “if we experience prolonged periods of adverse publicity, significantly reduced productivity or other negative consequences relating to this matter, our business likely would be adversely impacted.”

The suit specifically names Activision Blizzard CEO Bobby Kotick, as well as the current and former CFOs for the company. The suit alleges that by signing off on the document mentioned above, Kotick and others were “aware of or recklessly disregarded the fact that the false and misleading statements were being issued concerning the company”

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The plaintiff of the lawsuit is asking for “damages” payments and “further relief” as the court sees fit.

In other news, yesterday (August 3) Bobby Kotick told investors that “people will be held accountable for their actions”.

Adding to this, Kotick stated Activision Blizzard “will not just terminate employees where appropriate, but will also terminate any manager or leader found to have impeded the integrity of our processes for evaluating claims”.

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