Facing legal battles on many fronts, Activision Blizzard won a skirmish with a federal judge’s dismissal of a lawsuit from shareholders alleging the company lied to them by downplaying the impact of sexual harassment and harassment. allegedly widespread discrimination against female employees.
U.S. District Judge Percy Anderson ruled on Tuesday that investors did not report specific misrepresentations made by the company and that there was no requirement to disclose investigations by three separate government agencies. Anderson wrote that the shareholders “offer a speculative conclusion without enough detail about the defendants’ conduct to draw a strong inference” from an intent to mislead them.
Activision Blizzard shareholders have alleged that sexual harassment and gender discrimination are rampant in the company, particularly Blizzard Entertainment, and that it failed to disclose the misconduct despite investigations by the California Department of Fair Employment and Housing, the Equal Employment Opportunity Commission and the Securities and Exchange Commission. . They cited statements in documents filed with securities regulators that the company was only a “party to routine investigations” and codes of conduct that said it would not tolerate harassment, retaliation and discrimination.
Anderson concluded that the investors “did not plead enough facts to establish falsity” because they “scour long stretches of material” from the DFEH and EEOC lawsuits without sufficiently arguing that Activision Blizzard lied and intended to deceive them.
One of the reasons for the dismissal was that Activision Blizzard was not obligated to notify shareholders of federal and state investigations, the judge said.
Under securities laws, a company is required to describe pending legal proceedings with government authorities. But Anderson found that the Call of Duty The manufacturer was under no obligation to disclose either federal or state investigations, as they were not technically legal proceedings.
The financial disclosures the shareholders cited in their complaint were made before DFEH and EEOC were formally sued.
Anderson also argued that Activision Blizzard is not responsible for promoting general business ethics, particularly because such statements are required by the SEC. For such a claim to be actionable, the judge wrote that the company should have taken “no action at all in the face of gross and widespread violations” of its code.
“Based on the record, that does not appear to be the case,” the order reads.
Activision Blizzard revealed on April 15 that it was cooperating with a Justice Department lawsuit over alleged insider trading that may have been facilitated by CEO Bobby Kotick days before the games publisher was acquired. video by Microsoft, according to an SEC filing. .