- Activision Blizzard is now cited in a new lawsuit filed by a Los Angeles law firm
- Three c-level executives have been named in the lawsuit filed on behalf of investors
- According to the plaintiffs, Activision Blizzard knowingly withheld information that has proven damaging to their investment in the company
In the midst of a huge scandal of sexual misconduct in Activision Blizzard, the company now faces a new lawsuit arguing that the developer and publisher hid the information from investors.
Activision Blizzard Woes Continue to Mount
Activision Blizzard has been in disarray in recent months as the company's culture of alleged predatory behavior has come to light, endorsed by higher management. While the company said it would take decisive steps to eradicate any mistreatment of female colleagues at the workplace, Activision Blizzard is once again in investors' crosshair, and this time the matter will make it to court.
Rosen Law Firm, a Los Angeles law firm, has filed a case on behalf of investors against the company. Investors argue in their claim that the company knowingly failed to disclose how serious the California Department of Fair Employment and Housing's investigation was at first.
As a reminder, Blizzard has been accused of propagating a culture of sexual harassment and discrimination at the workplace. According to the newly-lodged lawsuit, Activision Blizzard's silence on the matter was tantamount to “fraud”.
Under the lawsuit's specific terms, any investor who had traded company securities between August 14, 2016, and July 27, 2021, has been affected by the ongoing scandal. Three high-ranking officials have been named in person in the lawsuit, with CEO Bobby Kotick, CFO Dennis Durkin, and former CFO Spencer Neumann all cited in the lawsuit. The news comes amid J. Allen Brack, Blizzard's president, leaving the company.
Executives Come Under Fire in New Lawsuit
The lawsuit has been brought on by Gary Cheng who has filed it on behalf of people he thinks have been affected in a similar way. Essentially, Cheng and his lawyers argue that investors were entitled to know about any ongoing proceedings that could have impacted the company's business negatively as per the SOX act requirements which bind any publicly traded entity to be forthcoming in such proceedings.
Specifically, present and former executives are to take the blame for failing to disclose this information in a timely manner that would have allowed investors to take measures and potentially avoid losses, although such losses would have to be proven in court. California's DFEH had investigated the company for two years prior to filing its lawsuit against Activision Blizzard, leaving out any doubt that people in the company knew.
Activision Blizzard has fought the allegations vehemently, qualifying them as “distorted in places,” but this only angered employees and fans who argued that the company's response had been disgusting.