A class-action lawsuit has been filed against Activision Blizzard in the District Court of California on the behalf of investors.
As reported by Kotaku, the lawsuit alleges that the company’s intentional failure to disclose ongoing issues concerning sexual harassment and discrimination caused artificial inflation of the stock value.
This is the second lawsuit the firm now faces and follows directly from the first suit that alleges abundant workplace misconduct, following a two-year investigation by the California Department of Fair Employment and Housing.
The lawsuit will seek damages based on the defendant’s issuing of false and misleading statements that violates federal securities laws. The suit aims to cover anyone who traded Activision Blizzard shares between August 4th, 2016 to July 27th, 2021.
Three company executives were named as instrumental in spreading misinformation, including CEO Bobby Kotick and former chief financial officers Dennis Durkin and Spencer Neumann.
The information in question is with regard to Activision Blizzard’s annual SOX (Sarbanes-Oxley Act 2002) certifications, which are published to protect the public from false and fraudulent accounting activities from publicly traded corporations.
The class-action lawsuit alleges that Activision Blizzard was aware of the internal issues of sexual harassment and discrimination when SOX certifications were published. As a result, the company intentionally omitted this information, according to the filing.
Spearheading the lawsuit on behalf of investors is The Rosen Law Firm in Los Angeles. Founded in 1997 and specialising in representing investors that have been a casualty of "corporate misconduct", Rosen Law Firm previously acted for investors at CD Projekt Red amid the Cyberpunk 2077 debacle.
Blizzard president J. Allen Brack stepped down from his role with the company after the first lawsuit came to light, with Jen Oneal and Mike Ybarra now co-leading the World of Warcraft developer.