The Securities and Exchange Commission said that Activision Blizzard Inc., a company that makes and sells video games, has agreed to pay $35 million to settle charges that it didn’t have controls and procedures in place to make sure that the company could figure out if the information it shared about its employees was enough. The company also paid to settle charges that it broke an SEC rule that protects people who report wrongdoing.
Financial Impact of Activision Blizzard Report
In accordance with the SEC‘s order, Activision Blizzard knew that between 2018 and 2021, its ability to recruit, retain, and motivate employees was a risk that was particularly significant to its operations, but it lacked unified controls and procedures throughout its divisions for collecting and investigating employee complaints of wrongdoing in the workplace.
So, the company’s management didn’t have enough information to know how many and what kinds of reports employees had about bad behaviour at work. They also didn’t know if there were any important problems that needed to be made public. Separately, the SEC’s order says that Activision Blizzard, in the normal course of its business, signed separation agreements between 2016 and 2021 that broke a rule about protecting whistleblowers by requiring former employees to let the company know if the Commission’s staff asked them for information.
Activision Blizzard, as stated by Jason Burt, Director of the SEC’s Denver Regional Office, “failed to implement necessary controls to collect and review employee complaints about workplace misconduct,” which prevented the company from knowing whether or not there were larger issues that needed to be disclosed to investors. It is prohibited and bad corporate practice to prevent former employees from communicating with Commission officials about a probable violation of securities legislation.
Activision Blizzard broke Exchange Act Rules 13a-15(a) and 21F-17(a), which is what the SEC’s order says. Activision Blizzard agreed to a stop-and-desist order and a $35 million fine without agreeing or disagreeing with what the SEC found.
Eric J. Day, Yamini Piplani Grema, and Daniel M. Konosky looked into the case for the SEC with help from Helena Engelhart Bean of the Denver Regional Office. Danielle R. Voorhees and Mr Burt, who are both from the Denver Regional Office, were in charge of the probe.