Activision Blizzard Under Investigation for Fraud Following Bungie Split
Call of Duty publisher Activision Blizzard is under investigation for fraud after a claim was brought forth by the company’s investors. Currently, the lawfirm of Pomerantz LLP is gathering potential investors for a class action lawsuit, but as of yet no official suit has been filed.
Although the timing of the announcement would suggest that the investigation is related to Activision and Bungie’s recent separation, the press release does not mention any connection. Still, Activision’s stock did drop following the announcement that Bungie would split from Activision and take publishing rights for the Destiny franchise, which certainly didn’t please the company’s investors.
Given that information, it’s possible that investors called for the investigation in order to see how much Activision Blizzard knew ahead of the split and if that had an impact on the stock price. Another possibility is that stock shares were sold right before the split was announced, which would constitute insider trading.