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Judge Allows Investor Lawsuit Against CBS to Proceed Due to Leslie Moonves’ #MeToo Comments

But suit has been pared down significantly

A federal judge has dismissed all but two claims in lawsuit against CBS, filed last year by shareholders after the ouster of CEO Les Moonves. But citing comments Moonves made about the #MeToo movement prior to his being fired over multiple accusations of sexual misconduct, the judge is allowing the pared-down lawsuit to proceed to the pretrial phase.

Moonves was fired in September 2018 after a New Yorker article by Ronan Farrow detailed the accounts of six different women who accused Moonves of sexual misconduct in incidents going back decades. In the lawsuit, filed in February 2019, CBS investors accused Moonves, acting CEO Joe Ianniello, and other CBS executives of selling off more than $200 million worth of stock while keeping secret information about widespread sexual harassment complaints that investors were not aware of.

CBS and Moonves later filed separate motions to dismiss the lawsuit. And in a court filing Wednesday night, U.S. District Judge Valerie Caproni granted those motions in part. However, Caproni also said that the lawsuit “adequately alleges” that Moonves “falsely implied that he was not personally at risk of a forced resignation or ouster based on accusations of sexual harassment” while speaking about #MeToo at a 2017 event.

According to the filing, at that event, Moonves called #MeToo “a watershed moment” and said “it’s important that a company’s culture will not allow for this. . . . There’s a lot we’re learning. There’s a lot we didn’t know.” Caproni called Moonves’ comments “materially misleading,” and said that he “implied that he had not known of these problems previously, even though, in truth, he was at that time actively seeking to conceal his own past sexual misconduct from CBS and the public.”

Caproni has given shareholders until Jan. 29 to file any amendments to their suit. Otherwise, “the remaining parties” in the lawsuit, which includes Moonves, are ordered to appear in court on Feb. 21 for a pretrial hearing.

CBS ceased to be an independent company when it was merged with Viacom in December. The new company is known as ViacomCBS.

Pamela Chelin contributed to this report.

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