Activision Blizzard agreed to pay $35 million to settle SEC charges that it violated disclosure controls and whistleblower protection rules. The settled enforcement action highlights the need for companies to align their SEC disclosures with appropriate controls and procedures, and reminds companies of the SEC’s continued focus on whistleblower protection.
On February 3, the SEC announced a $35 million settlement with Activision Blizzard stemming from the company’s alleged failure to maintain adequate disclosure controls and procedures relating to workplace misconduct complaints and for a violation of a whistleblower protection rule.
In its periodic filings with the SEC between 2018 and 2021, Activision included risk disclosures relating to its dependence on personnel with specialized skills and the high level of employee mobility and competitive pressures in the gaming industry. According to the order, during that same timeframe, Activision “lacked controls and procedures designed to ensure that information related to employee complaints of workplace misconduct would be communicated to Activision Blizzard’s disclosure personnel to allow for timely assessment on its disclosures.” The order also states that over several years, Activision entered into separation agreements that included a notification clause requiring former employees to notify the company of any request from an administrative agency relating to a report or a complaint. The SEC found that the clause...
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