SEC investigates Activision Blizzard over harassment and discrimination lawsuits

In video game parlance, longtime game publisher Activision Blizzard recently got into “extreme” difficulty, thanks to a wave of high-profile lawsuits. Monday, the company behind World of warcraft, Diablo, and Call of Duty arguably faced its biggest test to date, this time from the federal government.

The Securities and Exchange Commission is investigating Activision Blizzard into how the video game publisher handled allegations of sexual misconduct and discrimination in the workplace and whether the related information was properly disclosed to shareholders by executives.

The federal regulator has subpoenaed the company as well as several senior executives, including CEO Bobby Kotick, according to the Wall Street Journal. He also requested various documents, including Kotick’s communications with other executives on this matter, the minutes of board meetings held since 2019, the personal files of six former employees and the separation agreements drafted that year. year. Former employees were also reportedly subpoenaed.

Activision confirmed the SEC investigation in a statement to the WSJ, saying the company is cooperating with the agency.

Earlier this year, Activision Blizzard was accused of fostering a “frat boy” culture in a lawsuit filed against him by the California Department of Fair Employment and Housing. In the filing, the agency says the Santa Monica-based company paid women less, offered them fewer opportunities for advancement, and created “fertile ground for harassment and discrimination against women.” .

“Blatant sexual harassment”

Sexual harassment was reportedly rampant. “Top executives and designers have engaged in blatant sexual harassment without repercussions. In a terrible incident, an employee committed suicide while on a work trip with a male supervisor, who allegedly harassed her during the trip.

The lawsuit also claims that former senior creative director Alex Afrasiabi “was allowed to engage in blatant sexual harassment”, including openly hitting female employees, trying to kiss them, telling them he wanted to marry them, and more. Other male employees and supervisors had to physically remove him from his female colleagues, according to the lawsuit. Afrasiabi’s behavior was tolerated with “little or no repercussions”. Among Afrasiabi’s supervisors was Blizzard Chairman J. Allen Brack, who, according to the lawsuit, received reports from employees about the alleged behavior, but only gave the creative director a “slap in the face.” wrist “.

Afrasiabi was fired from the company in early 2020 for “misconduct in his treatment of other employees,” Activision Blizzard confirmed, and Brack left the company last month. In August, Activision also confirmed the departure of other employees, including Luis Barriga (former director of Diablo IV), Jesse McCree (a former Diablo IV designer) and Jonathan LeCraft (former World of warcraft designer) without specifying why they left. McCree and LeCraft were seen in photos posted by Kotaku that linked them to an alcohol-fueled BlizzCon 2013 after-party in what some staff members called the “Cosby Suite.”

Under pressure

Brack’s resignation came following a shareholder lawsuit that claimed the company had “artificially inflated” the value of shares and made “false and misleading statements” by withholding details of harassment, discrimination and abuse. misconduct. The documents filed by Activision Blizzard with the SEC, according to the shareholder lawsuit, included boilerplate language about the business risks posed by the lawsuits against the company. This language, according to the shareholders’ lawsuit, masked the “many complaints about unlawful harassment, discrimination and retaliation. [that] were made to human resources (“HR”) staff and executives who were not taken into account. “

Indeed, Activision Blizzard’s share price fell more than 6% on July 27, the day after the California lawsuit was made public, and has fallen further since.

The company’s initial response to the California lawsuit drew fierce criticism from employees, who circulated a petition calling on the company to acknowledge the “seriousness of the allegations.” “To claim that this is a ‘truly baseless and irresponsible trial’ when seeing so many current and former employees talking about their own experiences with harassment and abuse is simply unacceptable,” said he declared. Later in the week, employees staged a walkout to “end mandatory arbitration clauses” that “protect abusers and limit victims’ ability to seek restitution,” as well as new hiring and employment practices. ‘compensation.

SEC investigation comes as Activision Blizzard plans to release Diablo II: Risen September 23.