After a series of sexual harassment allegations, employee walkouts, strikes, boycotts, and further allegations about the company conducting coverups and hindering the ongoing investigation into its affairs, Activision Blizzard is now under investigation by the U.S. Government. The U.S. Securities and Exchange Commission (SEC) has joined the extensive list of government agencies investigating Activision Blizzard by subpoenaing the video game giant, investigating whether the company disclosed information about the aforementioned allegations to its investors in a timely fashion.
The SEC has launched a wide-reaching investigation into Activision Blizzard and several of the company’s high-ranking executives, including CEO Bobby Kotick. According to Kotaku, the government agency is looking into how the company handled multiple allegations of sexual harassment, racism, gender discrimination, and overall toxic workplace behavior, following a California DFEH lawsuit filed in July. Activision Blizzard has been asked to submit various documents to the SEC, including personnel files of six previous employees, and provide insight into the records of communication between CEO Bobby Kotick and other executives regarding the numerous sexual harassment complaints levied against Activision Blizzard staff.
However, in all likelihood, the SEC’s investigation isn’t about finding justice for the victims of horrible abuse and mistreatment within the company. Instead, the investigation is likely the consequence of a massive and quite damaging lawsuit filed by Activision Blizzard’s investors, which alleges that the company purposefully failed to disclose its ongoing sexual harassment and discrimination problems to artificially inflate the company’s stock value. Thus, it’s quite reasonable for investors to be dissatisfied with Activision Blizzard, given the ongoing string of allegations and bad press.
As the result of such actions allegedly taken by the defendant, in this case, Activision Blizzard, the SEC is investigating whether Activision Blizzard adequately disclosed all allegations of “frat boy” workplace culture, sexual harassment, and gender-pay issues to investors. But the investigation is trying to provide an answer to a more critical question: has the company reported these issues, and if it has, were the issues reported promptly? Perhaps the company and its executives made an honest effort to report said problems, but their puppies have collectively decided to eat the reports, unwittingly causing further allegations suggesting that the company tried to cover things up through NDAs, and legal threats against its employees.
The SEC’s investigation is yet another legal problem in a string of allegations and lawsuits Activision Blizzard faces. Following the initial lawsuit, filed by DFEH, and the company’s “tone-deaf” response, many gamers and fans of Activision Blizzard’s titles, most notably World of Warcraft and Call of Duty, organized sit-ins, massive log-offs, and other ways to boycott the games. Additionally, Blizzard employees organized strikes and walkouts, partially causing J. Allen Brack’s resignation as president of the company. Finally, due to major turmoil within the company, its titles suffered delays in development, which prompted many gamers to abandon Activision Blizzard titles.
Things are genuinely looking grim for Activision Blizzard. It’s worth noting that the company hired a union-busting law firm, WilmerHale, to review its handling of the various allegation and other issues. A well-played move, considering that the person leading the review, Stephanie Avakian, is a former director of SEC’s Division of Enforcement, which now oversees a team that’s protecting businesses from government litigation. This begs the following questions: Will SEC succeed in uncovering all of Activision Blizzard’s malfeasance? And if it does, just how deep does the company’s rabbit hole of depravity go?