Activision Blizzard Sued By Shareholder For "False And Misleading" Statements
The lawsuit alleges Activision Blizzard misled shareholders regarding the California Department of Fair Employment and Housing's two-year investigation and subsequent lawsuit.
Activision Blizzard is being sued once again, this time in a class-action lawsuit claiming that the company made "false and misleading" statements to shareholders in regard to an ongoing investigation, and eventual lawsuit, by the California Department of Fair Employment and Housing.
The lawsuit, filed in California's Central District and brought by the Los Angeles-based Rosen Law Firm, alleges that Activision Blizzard failed to properly inform shareholders about the two-year investigation and is now seeking appropriate damages for those who have recently acquired Activision Blizzard stock.
In light of the state's lawsuit accusing Activision Blizzard of fostering a "frat boy" culture rife with sexual discrimination and harassment, the suit alleges that statements about the company's business operations were in violation of federal securities law. The lawsuit goes on to state that "as a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s common shares, Plaintiff and other Class members have suffered significant losses and damages."
Activision Blizzard stock has steadily declined since news of the lawsuit went public, and is currently down more than 7% in the last five days. Statements regarding the California lawsuit from Activision Blizzard executive vice president Fran Townsend, and later CEO Bobby Kotick, caused thousands of current and former Activision Blizzard employees to sign an open letter on July 27 demanding change. Hundreds of employees walked off the job on July 28.
The lawsuit was filed by plaintiff Gary Cheng, who purchased Activision Blizzard shares sometime in the last five years. The lawsuit names Bobby Kotick, as well as current Activision Blizzard chief financial officer Dennis Durkin and former chief financial officer Spencer Neumann, as defendants. A spokesperson for Activision Blizzard declined to comment when contacted by GameSpot.
Blizzard president J. Allen Brack, who is cited in the state of California's lawsuit as allegedly being aware of the company's sexual harassment problems, announced he will be leaving the company. He will be replaced by "co-leaders" Jen Oneal, who led Vicarious Visions before it was merged into Blizzard last year, and Mike Ybarra, who once served a leadership role at Xbox before joining Blizzard in 2019.
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