Law Firm Pomerantz LLP Investigating Activision Blizzard Employees for Securities Fraud
Days after Activision Blizzard and Bungie announced the end of their partnership, the publishing giant is under investigation for “securities fraud” and “unlawful business practices.”
In a press release, law firm Pomerantz LLP has said that it is conducting the investigation on behalf of Activision Blizzard’s investors. The aforementioned claims were triggered by the company’s stock plummeting as a result of the surprise announcement.
“On January 11, 2019, the Company disclosed that it would be separating from its design and development partner Bungie, Inc. and that Bungie will assume full publishing rights and responsibilities for the Destiny franchise,” read the press release. “In the first five days of the Destiny franchise’s release, it sold $325M at retail. Following this announcement, Activision’s stock price fell sharply during intraday trading on January 11, 2019.”
At the moment, we don’t know how Activision Blizzard internally handled the announcement considering the risk of insider trading. In the absence of further details from Pomerantz LLP, it seems that the investors who took a financial hit from the company’s stock falling are unhappy with the management. The press release specifically mentions that Pomerantz LLP is investigating whether “certain officers and/or directors” engaged in unlawful practices.
Activision Blizzard recently fired its Chief Financial Officer after it emerged that he had accepted a job offer at Netflix while he was still with the company, which was against the terms of his employment. Shortly afterwards, Blizzard’s CFO Amrita Ahuja announced her departure.
It also recently emerged that Blizzard’s co-founder, Michael Morhaime, will be leaving the company for good in April 2019.