Over the last few weeks, Activision Blizzard has seen allegations of sexism, harassment, discrimination, and “frat boy” behavior. This has resulted in a lawsuit from California’s Department of Fair Employment and Housing, and now it seems a second lawsuit has been filed against the company, this time by its investors. The class action lawsuit (which can be found right here) was filed by the Rosen Law Firm, and it claims that Activision Blizzard “made false and/or misleading statements and/or failed to disclose” important issues, most notably the fact that the DFEH investigation had been going on for two years. The lawsuit argues that this disclosure would have had a negative impact on the company’s stock price.
“Had Plaintiff and the other members of the Class been aware that the market price of Activision Blizzard securities had been artificially and falsely inflated by Defendants’ misleading statements and by the material adverse information which Defendants did not disclose, they would not have purchased Activision Blizzard securities at the artificially inflated prices that they did, or at all,” the lawsuit reads.
When the initial lawsuit was first filed by the DFEH, Activision Blizzard CEO Bobby Kotick dismissed it in a statement calling it “irresponsible behavior from unaccountable State bureaucrats that are driving many of the State’s best businesses out of California.” That message drew a sharp rebuke from current and former employees of the company, with more than 2,000 signing a letter condemning his response. Last week, Kotick released a new letter directed at employees and the public, calling his previous remarks “tone deaf.”
In Kotick’s new letter, the CEO claimed that Activision Blizzard will be instituting multiple changes to make for a more inclusive workplace, including employee support, listening sessions, hiring practices, in-game changes, and personnel changes. This week saw the departure of Blizzard Entertainment president J. Allen Brack, but it’s unclear if more personnel will depart as a result of these allegations.
It remains to be seen where this new lawsuit will go, and whether or not it will be able to prove that Activision Blizzard actually misled investors by failing to disclose more information. The lawsuit is seeking a jury trial, and an unspecified amount in damages as well as attorney and expert fees.