Shareholders of the former CBS have settled a long-running securities class action lawsuit with the company over its handling of sexual assault allegations against former CEO Les Moonves. The $14.75 million cash payout covers shareholders of CBS from November 2017 to July 2018.
Moonves was pushed out of CBS in 2018 after multiple accusations of harassment. Investors led by the Construction Laborers Pension Trust for Southern California sued later that year, claiming that public lies and omissions by the company and Moonves left investors in ignorance of a full-blow sexual harassment scandal unfolding within. They said they lost money after news of the allegations became public, and they sued the broadcaster in New York federal court for violating securities law.
According to the initial suit, “Defendants made numerous materially false and misleading statements and/or omissions regarding the Company’s policies and corporate governance, the importance of key personnel, including Moonves, and other statements made to news media, which caused the price of the Company’s common stock to trade at artificially inflated prices, until the market learned of the false and misleading nature of the statements, and the Company’s stock price significantly declined.”
CBS had argued that securities law does not required it to disclose sexual misconduct allegation or potential impact on its business. To a certain extent, the judge in the case had agreed with the company in subsequent rulings.
Announcing the settlement (read its here), the lead plaintiff and lead counsel said they believe their claims have merit but are “mindful of the inherent problems of proof” under securities law. The decision to settle “balances the risks, costs, and delays inherent in complex securities class action cases” and recognize “the expense and length of continued proceedings necessary to prosecute the Action through trial and through appeals” given the uncertain outcome.
Moonves, for years the face of CBS and one of most highly respected executives in the business, became a face of the #MeToo movement following a New Yorker article that detailed accusations by multiple women of harassment and intimidation.
CBS had previously settled a dispute over Moonves’ $120 million exit package, with the cash, which had been held in escrow, reverting back to the company.
CBS merged with Viacom at the end of 2019. ViacomCBS was recently renamed Paramount Global.
Must Read Stories
Subscribe to Deadline Breaking News Alerts and keep your inbox happy.