Activision CEO Bobby Kotick allegedly knew for years about serious allegations of employee misconduct but sometimes kept board members completely in the dark about the alleged incidents, the Wall Street Journal reported Tuesday, adding to a slew of a scrutiny facing the video game behemoth since California authorities sued the company in July over allegations of widespread harassment and discrimination.
Despite telling directors and other executives he wasn\’t aware of many allegations of misconduct, Kotick received an email in July 2018 from an attorney threatening legal action and alleging her client, a former Activision employee, was raped in 2016 and 2017 by a male supervisor, WSJ reported Tuesday, citing the email and unnamed sources familiar with the matter.
According to the alleged email, which Forbes has not seen, the female employee reported the incidents to the human resources department and other supervisors, who ultimately took no action.
However, months after the lawyer\’s note, Activision reached an out-of-court settlement with the employee, according to WSJ; terms of the agreement are unknown.
Kotick, 58, is among several top Activision executives who\’ve been subpoenaed in an investigation the Securities Exchange Commission opened in September to probe Activision\’s workplace practices and the disclosures it made about recent misconduct allegations.
Though they were up more than 2% before the Tuesday report, shares of Activision plunged nearly 7% by 12:30 p.m. ET.
In a statement, Activision said the report \presents a misleading view\ of the company and its CEO, and claimed \instances of sexual misconduct that were brought to [Kotick\’s] attention were acted upon.\
Activision, the world\’s largest video game company by revenue, has faced an intensifying reckoning in the months since California regulators sued the video game behemoth over allegations of widespread sexual misconduct and other discriminatory practices at the company. In the suit filed on July 20, the California Department of Fair Employment and Housing alleged the company’s high-ranking executives engaged in a “a pervasive frat boy” culture that fostered a “breeding ground for harassment and discrimination against women.\ The company initially claimed the allegations were “distorted, and in many cases false,\ dismissing the claims in a statement that fueled an outcry among employees. More than 1,500 workers walked out of their jobs in protest this summer, and thousands more signed a letter slamming management\’s response to the allegations. Activision has since walked back its response, with Kotick calling the initial statement \tone deaf\ and pledging to investigate \each and every\ claim of wrongdoing.
Activision shares have plunged nearly 26% since the workplace allegations first came to light in mid-July, erasing more than a year of pandemic-fueled gains and wiping out nearly $19 billion in market value.
“We will not be silenced until Bobby Kotick has been replaced as CEO, and continue to hold our original demand for third-party review by an employee-chosen source,” ABK Workers Alliance, a group of workers across Activision’s studios, said on Twitter Monday. “We are staging a walkout today. We welcome you to join us.”
In early August, J. Allen Brack, a longtime executive of Activision\’s Blizzard Entertainment subsidiary, unexpectedly resigned from his post as president following allegations he knew about “constant sexual harassment” faced by female employees for more than a decade. Brack was not accused of wrongdoing and hasn\’t mentioned the allegations of a toxic workplace culture but said in a statement the two executive vice presidents tapped to replace him “will provide the leadership Blizzard needs to realize its full potential and will accelerate the pace of change.”
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