Activision Blizzard ditches investor lawsuit over lack of evidence

Activision Blizzard shed another lawsuit today. A U.S. District Court judge has dismissed the investor lawsuit against the company. This comes less than a month after the publisher settled a sexual harassment lawsuit for $18 million.

A group of Activision Blizzard investors filed the lawsuit last year. The plaintiffs claimed that the company’s leadership failed to disclose problems within the publisher and misled investors as to their severity. These problems include the rampant harassment and discrimination alleged by the Department of Fair Employment and Housing lawsuit. They also alleged that the company had failed to report the ongoing DFEH investigation.

The judge granted Activision’s motion to dismiss the case. To sum up the docket, the court found that the plaintiffs (the investors) offered “a speculative conclusion without sufficient details about Defendants’ conduct to raise a strong inference of scienter.” (“Scienter” meaning a knowledge of wrongdoing.)

One line of the ruling that caught my eye is the court’s comment about the climate around sexual harassment allegations. The investors apparently claimed that, following the MeToo movement, it was especially irresponsible of the defendants not to recognize that investigations would harm the company’s reputation. The judge responded, “The backdrop of the #MeToo movement and national media coverage of accused industry titans is too vague a concept to raise a strong inference of scienter.”

Meanwhile, the Wall Street Journal reported that the Daily Mail’s online arm, MailOnline, tried twice to publish a story about a restraining order against Bobby Kotick by his ex-girlfriend. Both times, the story was allegedly squashed at the behest of his then-girlfriend, Meta’s COO Sheryl Sandberg, who threatened the publication’s relationship with Facebook. Sandberg denied the allegations to the WSJ.