A group of Activision Blizzard investors who accused the publisher of misleading shareholders about federal and state investigations into sexual harassment allegations have been prevented from pursuing those claims under federal securities law.
The class action, submitted in August 2021, claimed that Activision Blizzard failed to mention the significance of ongoing government investigations into workplace misconduct, such as the lawsuit filed by the California DFEH which accused the Call of Duty maker of propagating a "frat boy culture."
As reported by Bloomberg Law, the investors allege they were misled by materially false statements delivered in SEC filings, the company's Code of Conduct, and the 2020 Environmental, Social, and Governance Report.
The lawsuit, however, has now been dismissed after Judge Percy Anderson of the U.S. District Court of California found those allegations to be lacking in particularity.
Judge Anderson granted Activision's motion to dismiss the suit on Monday, describing the investors' allegations as "bare bones assertions." Anderson added that "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."
Notably, Anderson also refuted the notion that individual executives must have been aware that misconduct was endemic at Activision Blizzard, adding the investors' complaint failed to establish the necessary facts to support that conclusion.
The investors now have 30 days to file an amended complaint.