© Reuters. 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
By Susan Heavey and Chris Prentice
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 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 between 2018 and 2021.
“Activision Blizzard (NASDAQ:) 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,” said Jason Burt, who heads the SEC’s Denver office, said in a statement.
The 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 Santa Monica, California-based video game developer and publishing 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 (NASDAQ:), 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.