Over the past few weeks, Activision Blizzard has seen reports of sexism, harassment, discrimination, and “frat boy” behavior. This has led to a lawsuit from the California Department of Housing and Fair Employment, and it now appears that a second lawsuit has been filed against the company, this time by its investors. The class action lawsuit (which can be found straight here) was filed by the Rosen Law Firm, and 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 ongoing for two years. The lawsuit argues that this disclosure would have had a negative impact on the company’s share price.
“If Plaintiff and the other members of the Class had learned that the market price of Activision Blizzard securities had been artificially and falsely inflated by the defendants’ misleading statements and by material adverse information that the Defendants did not disclose, they would not they would have bought Activision Blizzard securities at the artificially inflated prices they did, or not at all, “the lawsuit read.
When the initial lawsuit was first filed by the DFEH, Activision Blizzard CEO Bobby Kotick dismissed it in a statement calling it “irresponsible behavior by irresponsible state bureaucrats who are driving out many of the best companies in the state of California. ”. That message drew a strong reprimand from current and former employees of the company, with more than 2,000 signing a letter condemning his response. Last week, Kotick published a new letter to employees and the public, calling his previous comments “deaf.”
In Kotick’s new letter, the CEO stated that Activision Blizzard will institute multiple changes to achieve a more inclusive workplace, including employee support, listening sessions, hiring practices, gameplay changes, and changes of personal. This week saw the departure of Blizzard Entertainment president J. Allen Brack, but it is unclear if more staff will leave 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 not disclosing more information. The lawsuit seeks a jury trial and an unspecified amount in damages, as well as attorney and expert fees.
[H/T: Gamasutra]
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