The U.S. Securities and Exchange Commission's investigation of Activision Blizzard Corp. has ended with a settlement in which Activision Blizzard will pay $35 million to the SEC for violating government rules regarding whistleblower protection and failing to disclose information to investors. The settlement terms state that Activision Blizzard neither admitted nor denied guilt.

The SEC investigation began in 2021 when the California Department of Civil Rights filed a lawsuit against Activision Blizzard over the pervasive culture of sexual harassment (opens in new tab). The allegations in the lawsuit prompted both the SEC and the U.S. Equal Employment Opportunity Commission to launch investigations; the EEOC's investigation led to litigation, which was settled in 2021 for $18 million.

The alleged conduct took place over several years, beginning in 2016 for separation agreements that did not protect whistleblowers and in 2017 for disclosure. Activision Blizzard changed these practices from 2020 to 2022; the $35 million fine represents just over 0.5% of Activision Blizzard's 2022 gross profits (open in new tab) of $6.486 billion, or 0.5% of its gross profits from 2016 to 2022. 11%.

What sets the SEC investigation apart is not that it is about sexual harassment or workplace misconduct, but how Activision Blizzard analyzes and reports information internally and then discloses those reports to investors. Also examined were separation agreements signed by employees when they left the company that required them to tell Activision Blizzard if they intended to disclose information to government agencies.

Regarding the settlement and payment order, a news release by SEC Regional Office Director Jason Burt states, "Activision Blizzard failed to implement the necessary controls to collect and review employee complaints of workplace misconduct and failed to implement the necessary controls to disclose to investors the significant . and lost the means to determine whether a problem exists."

The SEC further stated that Activision Blizzard's "actions to prevent former employees from communicating directly with Commission staff about potential securities law violations is not only improper corporate governance, it is illegal."

In a statement to Polygon (opens in new tab), Activision Blizzard spokesman Joe Christinat said the company was "pleased" that the investigation was resolved amicably: "As the order acknowledges, we have enhanced our disclosure process regarding workplace reporting and have separated We have updated the language in the contract. This is part of our ongoing commitment to operational excellence and transparency. Activision Blizzard is confident in our workplace disclosures.