Federal and state regulators in California are broadening their investigations into Activision Blizzard and how its leadership handled its culture of workplace misconduct. As part of this effort, subpoenas have been sent out to company directors and LA police departments for information on CEO Bobby Kotick and 18 other former and current Activision Blizzard employees.
As reported by the Wall Street Journal (paywall,) these subpoenas have been sent out by the California Department of Fair Employment and Housing, who were also the ones to send out the initial lawsuit. The initial lawsuit didn't mention Kotick, other than his salary, or the company's directors, although allegations last November show that he may have had more of a part in the company's toxic culture than initially believed. Meanwhile, the SEC has also sent a subpoena to Activision Blizzard as part of their own investigation, asking for records and communications from a big list of current and former executives, dating back to 2016.
Both of these expanded efforts come shortly after Activision Blizzard announced that it was being bought by Microsoft for $75 billion. The subpoena by the SEC dates January 18th, the day just after the two companies announced the purchase, while a subpoena from the California regulator to the LA Police Department is dated two days later. If the investigations into Activision Blizzard aren't cleared up before the Microsoft deal closes, experts in acquisitions and mergers say that Microsoft will have to take them on as well. When asked about Activision Blizzard's workplace issues, Microsoft gaming chief Phil Spencer told the Journal that "We see the progress that they're making that was pretty fundamental to us deciding to go forward here." The Journal states that any new movement in the investigations is unlikely to derail the deal unless what they found affected the value of the company, a "material adverse change," as described by Charles Elson, founding director of the Weinberg Center for Corporate Governance at the University of Delaware.