Activision Blizzard Faces a Second Lawsuit Following The First Case Filed Against Them

The gaming world is once again shaken as Activision Blizzard is under fire once more facing a second lawsuit, a class action suit, following the first case of sexual harassment and gender discrimination filed against them. The company now has to deal with another legal action as they allegedly misled their investors with an intentional failure to disclose their issues.

Since the news broke out about the case filed by the California Department of Fair Employment and Housing against Activision Blizzard for honing a "frat boy" workplace culture with gender-based discrimination and sexual harassment last June 21, the stock prices of the company slowly declined to cause artificial inflation.

Another lawsuit was filed against Activision Blizzard, this time, from their investors, as they alleged that the company intentionally failed to disclose the problems they have as regards the sexual harassment and gender discrimination going on inside which resulted in artificial inflation of the value of the stocks that they put into Activision Blizzard.

Related: Blizzard President Steps Down Following Sexual Harassment Suit and Employee Walkout

The Q2 earnings call of the company that happened yesterday made the investors worried over the state of Activision Blizzard resulting in a class-action suit filed by Los Angeles' The Rosen Law Firm on behalf of these investors. It would cover anyone who traded in Activision Blizzard securities within the period of August 4, 2016, and July 27, 2021.

To simplify, the class-action suit filed in the U.S. District Court of Central California on behalf of the investors of Activision Blizzard stemmed from the very fact that the company has not been honest with them about the investigation on the sexual harassment and gender discrimination case and had they known this issue, they would not invest on the stocks of the company.

The class-action suit also seeks damages on the violations of Activision Blizzard on the federal securities laws for allegedly releasing materially false statements misleading the investors to put their stocks on the company while it is facing issues as regards their workplace culture.

The legal action sprung from Activision Blizzard's annual SOX certifications wherein under the Sarbanes-Oxley Act of 2002, the law states that every year, companies must release their SOX certification and disclose any legal issues that their company could face which includes investigations, audits, and the likes which could affect their business. This is signed by their executives as well.

The case not only has Activision Blizzard as the sole defendant as a corporate entity, but it also enjoined CEO Bobby Kotick, CFO Dennis Durkin, and former CFO Spencer Neumann, who were considered as instrumental in the issuance of the false information to the investors.