Activision Blizzard Investor Lawsuit Dismissed by US District Judge
Activision Blizzard is facing a lot of controversy over the past year because of the sexual assault allegations. Today, we're going to focus on a new development that happened during the Investor lawsuit. The cinch in a few words is that the lawsuit was recently dismissed by US District Judge Percy Anderson. However, the plaintiffs will be able to file another complaint after 30 days.
Let's start checking on the facts. The Activision Blizzard problem has, of course, angered its investors. Why? Because this kind of thing would de-value the company in the stock market. As such, a group of individual investors including Jeff Ross and Gary Cheng filed a claim in August 2021 that alleged that Actiblizz essentially downplayed the EEOC and DFEH's probes when they were looking into the sexual harassment issues within the company.
The investor lawsuit described Activision Blizzard as a "breeding ground for harassment and discrimination against women" while essentially being fully aware of what the results of the DFEH investigation would be. Unfortunately, this claim was recently dismissed by US District Judge Percy Anderson on the grounds of fraud by hindsight:
Plaintiffs contend that the media’s reaction to news of the regulatory investigations and Defendants’ statement in response to the DFEH Action 'belies any notion' that the regulatory investigations were ordinary or routine. But such allegations constitute 'fraud-by-hindsight' and absent particularized, temporal facts, are insufficient to support a claim of securities fraud.
To the extent plaintiffs allege that defendants must have known sexual harassment and discrimination were endemic by virtue of their respective positions at the company, the [first amended complaint] does not establish the requisite facts to support such a conclusion.
Not everything is final when it comes to this lawsuit, however. The document concluded that the group of investors can file another complaint addressing the issues highlighted in the dismissal, within 30 days. So, the group can still have some ground to maneuver so long as they meet the demands of the US District Court.