Under the Biden Administration, the Securities and Exchange Commission has aggressively enforced its Whistleblower Program. As we previously reported here and here, the SEC has increased its focus on employers’ agreements or procedures that it contends interfere with employee access to the SEC. More recently, the SEC has for the first time turned its attention toward employer compliance programs with draconian results for employers whose internal compliance efforts do not pass muster. Specifically, on February 3, 2023, the SEC announced a dizzying $35 million fine against Activision Blizzard, Inc. (“Activision”), a video game developer, largely for failing to implement an effective compliance system to process and track workplace misconduct complaints. Activision’s fine also included a violation for including a “Notice Clause” in the separation agreement template that it used between 2016 and 2021. We discuss each violation below and what this means for SEC-regulated employers going forward.
