An Activision Blizzard shareholder is suing over alleged SEC Violations in documents submitted as part of its future acquisition by Microsoft.
Earlier this year, it was announced that Microsoft intended to acquire Activision Blizzard. The acquisition would bring popular franchises under the Microsoft umbrella including Call of Duty, Warcraft, Overwatch, and many others.
This acquisition has not yet happened due to a lengthy process that requires regulators to approve the deal. Another obstacle has since emerged: a shareholder has levied new allegations regarding the SEC filings by the company.
Yet Another Activision Blizzard Lawsuit
Polygon explains that the lawsuit alleges that Microsoft's acquisition of Activision Blizzard would violate Section 14(a) and Section 20(a) of the Exchange Act based on documents filed after the announcement of the acquisition.
The alleged Section 14(a) violation is due to claims of "materially misleading" portions of the Preliminary Proxy Statement that was prepared as part of the acquisition process.
As for the alleged Section 20(a) violation, the lawsuit claims that it is due to "non-public information" that was known by individual defendants. This information should have made the alleged "materially misleading" portions obvious to listed defendants who should have, in turn, ensured that the document was correct prior to its release. However, the Preliminary Proxy Statement was filed despite this knowledge.
The lawsuit seeks to stop the proposed Microsoft acquisition. In the event that fails, the lawsuit instead seeks for the plaintiff to be awarded legal fees and "rescissory damages," which are damages based on the value of a stock at the time a judgment is handed down by the court.
Activision Blizzard responded to the lawsuit with a short statement to Polygon:
"We disagree with the allegations made in this complaint and look forward to presenting our arguments to the Court."