Washington, DC, February 3, 2023—The Securities and Exchange Commission (SEC) announced that video game developer Activision Blizzard Inc. agreed to pay $35 million to settle allegations that the company failed to have adequate controls in place to collect employee complaints of misconduct, so that the company could ensure that its disclosures were accurate. In addition, Activision also settled allegations that it violated SEC whistleblower program rules that protect against a company impeding whistleblowers from reporting to the SEC. It was alleged that former employees were required to provide notice to the company if they received a request for information from the SEC.
Statement of Erika Kelton, Whistleblower Attorney and Partner, Phillips and Cohen
“The Activision settlement is extremely important and puts companies on notice that toxic workplace culture may be material to a company’s SEC disclosure obligations. Looking the other way now carries greater risk, and companies would do well to have controls in place to assess that risk.
The SEC action also underscores how whistleblowers are essential to the SEC’s enforcement efforts. The agency once again took forceful action to protect the whistleblower program against efforts to impede reporting – in this case by requiring former employees to notify the company when contacted by the SEC. By taking this action to settle charges with Activision Blizzard for violating whistleblower program rules, among other charges, the SEC shows how important whistleblowers are to the agency’s enforcement agenda.”