A Los Angeles law firm that filed a class-action lawsuit against CD PROJEKT RED for its botched launch of Cyberpunk 2077 has filed a new class-action lawsuit against Activision Blizzard today.
The lawsuit alleges that Activision Blizzard’s failure to disclose the depths of the California Department of Fair Employment and Housing’s investigation into its alleged rampant problem with sexual harassment and discrimination in the workplace constitutes fraud. The full breadth of the new lawsuit covers any investor that has traded in Activision Blizzard securities in the time period from Aug. 14, 2016 to July 27, 2021. The DFEH filed its lawsuit against Activision Blizzard on July 20, 2021. The lawsuit also names current CEO Bobby Kotick, current CFO Dennis Durkin, and former CFO Spencer Neumann by name.
A class-action lawsuit is filed by one person, Gary Cheng in this case, but is filed on behalf of a much larger group of people who have been affected in a similar way. The lawsuit seeks “damages in favor of plaintiff and the other Class members against all defendants, jointly and severally, together with interest thereon,” the awarding to the plaintiffs of “Class reasonable costs and expenses incurred in this action, including counsel fees and expert fees,” and any relief the court deems just.
The SOX act requires the disclosure to investors of any information of publicly-traded companies, like Activision Blizzard, that could negatively affect the company’s business. The SOX certification is filed annually and signed off by chief executives within the company, such as Kotick, Durkin, and Neumann. Put simply, the lawsuit alleges that the three named defendants willingly misled investors about depth of the allegations against the company by omitting the severity of the allegations in their reports.
The California DFEH filed its lawsuit against Activision Blizzard after concluding a two-year investigation, which the labor agency claims found multiple instances of sexual harassment, unequal pay, and retaliation against women in the workplace. The agency also alleged the company fostered a “frat boy” environment, and that pleas to Activision Blizzard human resources were largely ignored.
Nearly a week after the DFEH filed its suit and Activision Blizzard called the allegations “distorted, and in many cases false, descriptions of Blizzard’s past,” as well as subsequent protests against the company by former and current employees, Kotick called the company’s initial response “tone deaf” and claimed Activision Blizzard would be taking actions to transform the company environment.
