Is Recent SEC Disclosure-Controls Settlement A Blueprint For ESG Enforcement?

The recent US$35 million settlement¹ between Activision Blizzard, Inc. (Activision) and the United States Securities and Exchange Commission (SEC) is noteworthy for Canadian reporting issuers, their directors, officers and other stakeholders. It raises novel issues concerning the extent to which the adequacy of a reporting issuer's internal controls and procedures concerning disclosure will be policed by securities regulators – even in the absence of any finding of materially misleading disclosure. This settlement also raises important implications for issuers about the adequacy of internal controls and procedures that may be required to support ESG-related disclosure.

The SEC Settlement in Activision Blizzard