Activision Blizzard hit with federal investigation, Bobby Kotick subpoenaed

Activision Blizzard now faces a federal investigation, The Wall Street Journal reported Monday, into how the company has handled employee allegations of workplace discrimination, sexual harassment, and sexual misconduct. The company’s workplace environment has faced public scrutiny since California authorities filed suit to prosecute similar claims back in July.

The U.S. Securities and Exchange Commission has subpoenaed Activision chief executive Bobby Kotick, as well as several other senior executives, the Journal reported. The newspaper quoted sources familiar with the investigation and said it had viewed documents related to the case.

An Activision spokesperson acknowledged the SEC’s investigation, and told the Journal that regulators were examining “the company’s disclosures regarding employment matters and related issues.” The Activision representative said the company is cooperating with the SEC.

On July 20, the California Department of Fair Employment and Housing brought a civil suit against Activision Blizzard, alleging the company tolerated gender-based discrimination, sexual harassment, and a “frat boy” workplace culture, primarily at its Blizzard Entertainment division based in Irvine, California. Blizzard is best known for its Overwatch, Diablo, and World of Warcraft franchises. Parent company Activision also publishes Call of Duty.

California DFEH’s suit followed a two-year investigation, and the complaint named several top executives in alleging Activision Blizzard knew of and enabled the workplace misconduct. One of them, Blizzard Entertainment president J. Allen Brack, stepped down from his position two weeks later.

The same day Brack quit, an Activision Blizzard shareholder filed a lawsuit against the company, alleging that negligent oversight and false statements to investors, regarding employee complaints, caused the company’s share price to lose substantial value.

Similarly, the Securities and Exchange Commission’s probe is examining both how Activision Blizzard handled harassment and discrimination issues, “and whether any of that information should have been shared earlier with investors and other parties,” The Wall Street Journal reported.