Court dismisses investor lawsuit against Activision Blizzard, calling it “fraud by hindsight”

Disgruntled shareholders claimed that company management knew about the problems and intentionally misled them

It is easy to lose count of the legal claims against Activision Blizzard, but one of them was a class action lawsuit by investors claiming that the company knew about the claims from the California Department of Fair Employment and Housing (DFEH) and intentionally concealed the issues instead of warning shareholders about the potential fallout. Or rather, used to be.

The court dismissed the lawsuit, calling it “fraud by hindsight”. This is a legal term used in cases where investors bring charges against struggling companies that, in their view, should have been able to see the future and predict how certain events would unfold.

U.S. District Judge for the Central District of California Percy Anderson stated that the DFEH investigation could by no means be classified as “ordinary and routine”, and the investors' claims were based on “temporal proximity” insufficient to support allegations of securities fraud. According to the court, it was unreasonable for investors to expect Activision to predict outcomes in an extraordinary situation.