Santa Monica-Based Activision to Pay $35M to Settle SEC Allegations
Santa Monica-based gaming company Activision Blizzard has agreed to pay $35 million to settle allegations made by the US Securities and Exchange Commission (SEC). The allegations concerned the company's reporting of certain business practices, including the recognition of certain revenue.
The SEC claimed that Activision engaged in "improper accounting practices" which inflated its earnings and misrepresented its financial results to investors. The company has not admitted to or denied the allegations, but has agreed to pay the $35 million fine and comply with certain undertakings.
In a statement, the SEC said that the settlement demonstrates its commitment to holding companies accountable for their financial reporting and maintaining the integrity of the securities markets.
The settlement is seen as a major victory for the SEC, which has been cracking down on financial reporting irregularities in recent years. Companies have been increasingly scrutinized for their financial practices, with the SEC taking a particularly hard line on those that are seen to have misled investors.
Activision has declined to comment on the settlement, but in a statement, the company said it was "pleased to have reached an agreement with the SEC and to put this matter behind us."
This settlement is expected to have a significant impact on Activision's financial results, but the company's stock price has remained stable following the announcement.
The gaming industry continues to be a rapidly growing sector, with Activision's recent settlement serving as a reminder of the importance of accurate financial reporting and the consequences of failing to do so.