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Now America's financial watchdog probes 'frat house' Activision Blizzard

Plus: Chief Legal Officer exits as court battles loom

The SEC has launched an investigation into Activision Blizzard, and has subpoenaed several current and former employees, including CEO Bobby Kotick, the California games giant confirmed on Tuesday.

Activision has been hit with separate lawsuits from its home state’s Department of Fair Employment and Housing, and the federal government’s National Labor Relations Board. That first one, filed in July, accused the company of fostering a "frat boy" culture that led to lower pay for female employees, sex and race discrimination, and sexual harassment.

Staff publicly spoke out against Activision on social media and urged executives to enforce new policies, such as being transparent about salaries. They claim in the second lawsuit that they were intimidated by bosses, and attempts at forming a union were thwarted.

Now, the Call of Duty goliath could be facing a third lawsuit.

The SEC is probing whether the games giant disclosed the sexual and employment misconduct claims to investors in time before the scandals were exposed publicly, the Wall Street Journal first reported. As part of the investigation, communications relating to the corporation's employment practices between former and current executives have been subpoenaed, including its CEO Bobby Kotick.

People queuing outside an event for Call of Duty Advanced Warfare

Activision Blizzard accused of union busting, intimidating staff in complaint to watchdog


“We are deeply committed to making Activision Blizzard one of the best, most inclusive places to work anywhere,” Kotick claimed in a statement. “There is absolutely no place anywhere in our Company for discrimination, harassment, or unequal treatment of any kind. While we continue to work in good faith with regulators to address and resolve past workplace issues, we also continue to move ahead with our own initiatives to ensure that we are the very best place to work. We remain committed to addressing all workplace issues in a forthright and prompt manner.”

Kotick confirmed that Activision is complying with the SEC’s demands “regarding disclosures on employment matters and related issues.”

Blizzard leader J. Allen Brack and head of HR Jesse Meschuk resigned last month. Jen Oneal and Mike Ybarra – who were executive vice-presidents of development, and platform and technology, respectively – are now co-leaders of the games studio. As the company faces mounting pressure, Claire Hart, its chief legal officer also departed, according to her LinkedIn profile.

Activision is known for overseeing popular games such as Crash Bandicoot, World of Warcraft, and StarCraft. Its stock price was down four per cent at the time of writing to $73.03. ®

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