'Call of Duty' maker Activision Blizzard to pay $35 million over U.S. SEC charges

FILE PHOTO: The Activision booth is shown at the E3 2017 Electronic Entertainment Expo in Los Angeles, California, U.S. June 13, 2017. REUTERS/ Mike Blake/File Photo

WASHINGTON/NEW YORK (Reuters) -Activision Blizzard Inc has agreed to pay $35 million to settle U.S. Securities and Exchange Commission charges that it failed to have systems in place to properly handle disclosures of employee complaints and violated whistleblower protection rules, the regulator said on Friday.

The SEC said the company knew employee retention issues were "a particularly important risk in its business" but did not have adequate measures in place to manage workplace misconduct complaints across business units between 2018 and 2021.

"Activision Blizzard failed to implement necessary controls to collect and review employee complaints about workplace misconduct, which left it without the means to determine whether larger issues existed that needed to be disclosed to investors,” Jason Burt, who heads the SEC's Denver office, said in a statement.

The video game developer and publishing company, which makes the popular "Call of Duty" game, also required employees between 2016 and 2021 to tell the company if the SEC contacted them for information - a violation of whistleblower protection rules, the agency said in the statement.

Representatives for Activision Blizzard, which did not admit or deny the SEC's charges, said in a statement they were "pleased to have amicably resolved this matter" and had "enhanced" their workplace reporting and contract language.

The company made changes between May 2020 and May 2022 that enhanced the way complaints were collected and communication to senior managers, the SEC said in its order.

The Santa Monica, California-based company previously settled a U.S. Equal Employment Opportunity Commission lawsuit alleging widespread sex discrimination.

The company fired a slew of people to address widespread allegations of sexual harassment and other misconduct. Its board has said it found no evidence to suggest senior executives intentionally ignored and sought to downplay the issues.

Microsoft Corp, which makes Xbox, had made a $69 billion bid to acquire Activision Blizzard, but the Federal Trade Commission asked a judge in December to block the transaction. EU authorities are also examining the deal.

Shares of Activision Blizzard were down 1.8% by 12:35 p.m. EST (1735 GMT) amid a broader sell-off on Wall Street. [.N]

(Reporting by Susan Heavey in Washington and Chris Prentice in New YorkEditing by Doina Chiacu, Matthew Lewis and Frances Kerry)

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