An Activision Blizzard Inc. investor hit the video game giant Tuesday with federal securities fraud claims in Los Angeles claiming it kept shareholders in the dark about an ongoing state investigation into its toxic workplace culture.
The lawsuit, filed Tuesday in the U.S. District Court for the Central District of California, also targets Activision Blizzard's CEO, chief financial officer, and ex-CFO.
The suit accuses the company of stuffing its securities filings with vague disclosures about "routine" legal claims to deflect attention from the existential threat posed by an investigation into its "frat boy" culture by the California Department of Fair Employment and Housing.
When the agency's lawsuit against the company came to light July 21, its stock price plunged, leading to a "precipitous decline in the market value," the complaint says.
Activision Blizzard failed to disclose "numerous complaints about unlawful harassment" despite knowing that "the pervasive culture of harassment, discrimination, and retaliation would result in serious impairments" to its operations, according to the proposed class action.
That concealment artificially inflated the company's stock, the suit says.
