A plaintiff named Gary Cheng, who acquired shares in Activision Blizzard sometime between 2016 and 2021, filed a lawsuit against the company through the Rosen law firm. He claims that management deliberately made “false and misleading” in their financial statements, which resulted in the California Department of Fair Employment and Placement (DFEH) trial as a surprise to all investors, as did the ensuing scandal.
The lawsuit says that the heads of the corporation, including CEO Bobby Kotick, were aware of the situation in the company and the investigation, which was being carried out by regulators. However, it was publicly said that such checks are routine and should not be given much importance.
Thus, the cost of securities was artificially inflated, and investors continued to invest their money in Activision Blizzard, as if nothing had happened. At the same time, after the state of California still filed a lawsuit against the corporation, the shares fell by about 10%.
As the text of the complaint emphasizes, if investors knew about the problems in the company and how serious the claims of the Californian government are, they would not have invested in the corporation. Now the plaintiff is seeking damages.
Cheng and Rosen are urging those who acquired Activision Blizzard securities from 2016 to 2021 to join the lawsuit and hope it will gain collective status.
The DFEH lawsuit was filed on July 22. Since then, the company has issued several statements that have not satisfied ordinary studio employees who have staged a strike, as well as organized their own workers’ union, The ABK Workers Alliance. On August 3, the company announced the change of the head of Blizzard: President Jay Allen Brack will be replaced by co-heads Mike Ibarra and Jen Onil.