Shareholders sue Activision Blizzard for withholding information about harassment

In a proposed class action lawsuit, Activision Blizzard shareholders say they have been “economically harmed” by company executives who withhold recently disclosed information and allegations through a discrimination lawsuit and California Department of Employment and Housing (DFEH) harassment against the company.

The class action lawsuit, filed in California federal court by law firm Rosen, specifically names Activision Blizzard CEO Bobby Kotick, current CFO Dennis Durkin and former CFO Spencer Neumann. These executives and others were “aware or recklessly ignored that false and misleading statements were being made about the company,” according to the complaint.

To support this claim, the lawsuit cites several SEC Activision Blizzard filings made from mid-2016. These filings included boilerplate language regarding the business risks imposed by various legal issues. Activision Blizzard has stated that “such ongoing claims and lawsuits are not material and we do not expect them to have a material adverse effect on our business, financial condition, results of operations or liquidity”, indicates the pursuit.

This line and others like it in the documents hide the fact that Activision Blizzard had filed “numerous complaints of unlawful harassment, discrimination and retaliation [that] were made to staff and human resources (“HR”) executives who were not treated, “according to the complaint. The complaint goes on to suggest that” the pervasive culture of harassment, discrimination and retaliation [at the company] would seriously alter the operations of Activision Blizzard. “

The proposed lawsuit says the company did not tell shareholders that it was under investigation by the California DFEH or that it risked “greater risk of regulatory and legal review and enforcement.” based on these undisclosed facts.

All of this led to an Activision Blizzard share price that was “artificially inflated”, according to the complaint, causing shareholders to overpay on the basis of misinformation. Shareholders are entitled to damages based on this overpayment, the lawsuit said. Shares of Activision Blizzard fell more than 6% on July 27, the day after the lawsuit was publicly revealed. Since then, the stock has fallen a further 5%, based on Tuesday’s closing price of $ 79.83.

This morning, Activision Blizzard announced that Blizzard President J. Allen Brack is stepping down after nearly 16 years with the company. The move comes after thousands of Activision Blizzard employees signed a petition denouncing the company’s initial response to the California lawsuit and hundreds of them participated in a “Walkout for Equality” day. last week while demanding action on many fronts.