Activision Blizzard Lawsuit: Season of the SEC
For the sake of clarity, Rule 10(b) of the Securities Exchange Act is specifically mentioned in Pomerantz's complaint. The provisions that comprise 10(b) are pretty standard when it comes to legislation designed with the protection of commercial interests in mind. It's a bit of a common sense laundry list: thou shalt tell investors things, thou shalt not engage in an act that would be considered fraud, and thou shalt not make untrue statements regarding the purchase or sale of a security.
10(b) of the SEA also means that it's illegal to be deceptive when dealing with the purchase or sale of securities in a way that would be contrary to the SEC's rules on protection of investors. In the past, courts in the United States of America have ruled that private parties can sue under Section 10(b)-5, which is a specific provision that imputes liability for failure to disclose material facts that investors would consider crucial when considering whether or not to buy or sell a security.
Section 10(b)-5 is specifically highlighted in Pomerantz LLP's complaint, which is as good an indication as any that it's where they plan to hook Blizzard Activision. It's also worth noting that their complaint specifically mentions that the class intends to pursue remedies not only against Blizzard Activision but also against its top officials.
Activision Blizzard Lawsuit: How Could This Pan Out?
From the number of class actions being brought against Blizzard Activision, it's possible that scorned investors and shareholders can smell blood in the water in the wake of Bungie's departure. That being said, the large majority of these suits are still seeking a lead plaintiff i.e. someone to essentially put in the hard yards for the other affected members of the class and to be more involved in things like litigation strategy.
While these suits have been filed, they're still missing the essential human component to them to take the matter further. That's likely why Kuznicki Law is putting out the call to arms. However, just because a suit has been filed doesn't necessarily mean that it'll get all the way through a protracted trial even if a lead plaintiff is found.
Settlements are often the way that a lot of class action suits go. While the investors and shareholders from Blizzard Activision may well be more moneyed than the average Joe, these suits can become an exercise in incinerating money quicker than you think, especially if there's any uncertainty about the extent of the damages that the class could potentially claim from the company; whatever they get is going to have to be divvied up in the end.
Remembering that Activision Blizzard's CEO, Bobby Kotick, made a list of the Most Overpaid executive officers in the United States means that those sweet millions of his could be part of the honeypot too. This could definitely be a consideration for the class when it comes to settlement offers.
Whether any directors or authorized persons in the company could actually be left personally on the hook for this alleged potential SEC violation remains to be seen, but it will be up to Activision Blizzard and any other named parties that the class seeks remedies from to refute these claims.
Ultimately, it's anyone's game when it comes to a class action suit, and we don't have enough information on deck about the content of claims to make a definite judgment. One thing's quite clear though — a long trial could jeopardize Activision Blizzard's commercial standing even further in the wake of its already-falling stock prices, so these lawsuits could signify series of gambles that the company potentially can't afford to make.