CBS Sued by Shareholder After Stock Drops on Les Moonves Sexual Harassment Accusations

Gene Samit is starting a class-action lawsuit

Last Updated: August 27, 2018 @ 11:59 AM

CBS stockholder Gene Samit has sued the network and its top executives Leslie Moonves and Joe Ianniello over the drop in company share price that occurred after Moonves was accused of sexual harassment by numerous women.

Samit says he’s suing on behalf of others, and intends for his case to turn into a class-action lawsuit. The plaintiff is opening his suit to anyone who purchased or otherwise acquired CBS stock between February 14, 2014 through July 27, 2018.

Basically, Samit accuses Moonves of not practicing what he preached with regards to promoting a safe work environment, and in violating his own policy, he harmed shareholder value.

“Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies,” one part of the Monday court filing read. “Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) CBS executives, including the Company’s Chairman and Chief Executive Officer (‘CEO’), Defendant Leslie ‘Les’ Moonves, had engaged in widespread workplace sexual harassment at CBS; (ii) CBS’s enforcement of its own purported policies was inadequate to prevent the foregoing conduct; (iii) the foregoing conduct, when revealed, would foreseeably subject CBS to heightened legal liability and impede the ability of key CBS personnel to execute the Company’s business strategy; and (iv) as a result, CBS’s public statements were materially false and misleading at all relevant times.”

Shares of CBS fell hard on July 27, which is when the bombshell New Yorker story outlining the accusations against Moonves came out. The stock price has creeped back up a bit since then, but it’s still down about $4 per share. Samit is suing for damages and other relief.

Prior the Ronan Farrow’s magazine story, CBS did not have any reports of such inappropriate behavior by Moonves. When reached, CBS declined comment on this lawsuit.

Pamela Chelin contributed to this report.

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