Activision Blizzard will pay $35 million to settle SEC charges over its handling of complaints

will pay $35 million to settle charges from the that it “failed to maintain disclosure controls and procedures to ensure that the company could assess whether its disclosures pertaining to its workforce were adequate.” The settlement also resolves charges that Activision Blizzard violated whistleblower protection regulations. The company is settling the charges without admitting to or denying them.

“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,” SEC Denver regional office director Jason Burt . 

The SEC claims that, between 2018 and 2021, the company “lacked controls and procedures among its separate business units to collect and analyze employee complaints of workplace misconduct.” Because of that, Activision Blizzard higher ups didn’t have the information they needed to fully comprehend the substance and number of workplace misconduct complaints, according to the order. Nor did management review whether there were any material issues that would have warranted public disclosure, the SEC found.

In addition, the SEC determined that the company violated a whistleblower protection rule as a result of separation agreements it carried out between 2016 and 2021. Activision Blizzard allegedly required former workers to provide it with notice if the SEC contacted them for information. “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,” Burt, one of the supervisors of the investigation, said.

“We are pleased to have amicably resolved this matter. As the order recognizes, we have enhanced our disclosure processes with regard to workplace reporting and updated our separation contract language,” an Activision Blizzard spokesperson told Engadget in a statement. “We did so as part of our continuing commitment to operational excellence and transparency. Activision Blizzard is confident in its workplace disclosures.”

The agency started investigating Activision Blizzard over these issues by September 2021, according to reports at the time. Two months earlier, the California Department of Fair Employment and Housing (DFEH) over allegations of systemic gender discrimination and widespread sexual harassment.

The SEC probe related to how Activision Blizzard managed complaints over such incidents. It says that the company changed its processes for handling complaints between 2020 and last year to make sure that it documented the complaints more thoroughly and better communicated them to its senior management and legal team. Last June, Activision Blizzard that discloses how the company handles sexual harassment and gender discrimination complaints, and what it’s doing to prevent such incidents.

In January 2022, Microsoft said it planned to buy Activision Blizzard . The Federal Trade Commission has sued . Regulators in the UK and European Union are also scrutinizing the pending merger.