Santa Monica-Based Activision to Pay $35M to Settle SEC Allegations

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SANTA MONICA (CNS) - Santa Monica video game developer Activision Blizzard has agreed to pay $35 million to settle allegations that the company violated federal whistleblower protections and failed to maintain adequate disclosure standards, the U.S. Securities and Exchange Commission announced Friday.

The SEC claimed Activision -- maker of such blockbuster games as "Call of Duty" and "World of Warcraft" -- failed to implement controls to collect and review employee complaints about workplace misconduct, which left the company without the means to determine whether larger issues existed that needed to be disclosed to investors.

"Moreover, taking action to impede former employees from communicating directly with the Commission staff about a possible securities law violation is not only bad corporate governance, it is illegal," Jason Burt, director of the SEC's Denver regional office, said in a statement.

Without admitting or denying the SEC's findings, Activision agreed to a cease-and-desist order and to pay the $35 million penalty.

The company settled an Equal Employment Opportunity Commission probe in March for $18 million over related claims of retaliation.

In December, the Federal Trade Commission moved to block Microsoft's acquisition of Activision, alleging that the deal would violate federal antitrust laws.

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