Investor Rights Law Firms Launch Securities Claims Investigations Against Activision Blizzard
Several global investor rights law firms have announced their own investigations of potential securities claims on behalf of Activision Blizzard shareholders, as a result of the
discrimination lawsuit by the California DFEH against Activision Blizzard
. The class action lawsuits seek recovery of investor losses, alleging that the company's failure to inform investors of the ongoing investigation resulted in a misleading stock market share price.
In short, publicly traded businesses are required to issue regular material statements about what is happening within their business which may impact shareholder value (e.g. stock price), commonly in the form of quarterly investor earning calls, and not disclosing these ongoing issues could be considered a breach of their fiduciary duties - resulting in misleading business information and a possible violation of the
Securities Exchange Act of 1934
. In other words, by not sharing information about the two year investigation into several more years of alleged ongoing harassments and unfair workplace practices, Activision has potentially misled investors into thinking the stock is more stable than it actually is, as evidenced by a 10% dip in ATVI's stock market price yesterday, from an opening price of $91.03 on the 26th to a low of $81.56 on the 27th.
Although that seems damning, it is key to remember that these suits are fairly common and not even the first time Activision has faced securities investigations. They happen routinely following major events which result in noticeable stock market dips. A similar
securities claim was launched by Pomerantz Law Firm
in January 2019, following Bungie's split from the Activision umbrella and a resulting 9.37% drop in stock price. The complaint alleges that the initial commercial success of Destiny 2 led to surging stock prices, while failing to disclose the termination of their partnership ahead of time resulted in the company making materially false and misleading statements to the public. So far we've been unable to find any resolution of this particular claim, but they are a commonly used tool for investors to attempt to reclaim investment losses, with dozens of firms often putting out their own individual calls for investors to join their individual suits, rather than making a single unified case for all affected investors. That said, it should be pointed out that they typically only represent those who have incurred significant losses of $50,000, $100,000, or more. At least half a dozen firms have announced their investigations so far, encouraging investors to join their suits.
Bobby Kotick finally made a public statement
yesterday, calling their
tone deaf, and announcing an independent review of their policies and procedures by D.C. law firm WilmerHale. Known for its work in IP, securities, and appellate litigation, WilmerHale has extensive experience assessing workplace culture - the firm previously conducted an inquiry into
sexual abuse claims at the University of Michigan
retained by the New York Mets
baseball team during a workplace culture probe which led to the resignations of two longtime team executives, and even
on corporate and securities law compliances in 2015.
While these would have been been good first steps though, they may be too little and too late, with employees and players already responding in the form of an
. Former employees have
their own abhorrent
experiences with the company
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