Former CBS CEO Leslie Moonves and Paramount Global have agreed to pay a combined $24.5 million to CBS shareholders to settle an investigation into Moonves’ sexual misconduct claims and insider trading at the company that led to the long-time executive’s firing in 2018 at the height of the #MeToo movement.
According to the office of New York Attorney General Letitia James, the state secured a settlement totaling $30.5 million from Moonves and CBS, citing the concealment of sexual assault allegations against Moonves, misleading investors about those allegations as well as insider trading.
In the latter case, former Chief Communications Officer Gil Schwartz was authorized to sell nearly $8.5 million of CBS stock ahead of the public disclosure of the allegations — which top executives had learned from an unididentified captain a the Los Angeles Police Department. Together, network executives and the LAPD captain worked for months to keep the assault allegations from becoming public, including the sharing of confidential witness statements and unredacted police reports, James’ office said. (Schwartz died in 2019 at age 68.)
Later on Wednesday, LAPD Chief Michel Moore announced that it was investigating a now-retired LAPD captain accused of leaking the documents to CBS brass. What is most appalling is the alleged breach of trust of a victim of sexual assault, who is among the most vulnerable, by a member of the LAPD,” Moore said. “This erodes the public trust and is not reflective of our values as an organization.”
In addition to the $30.5 million payout, a majority $24.5 million of which will go to CBS shareholders, the network has pledged to reform HR protocol around sexual harassment and provide biannual reports back to the New York attorney general. Moonves will also be unable to hold executive or officer positions at a publicly traded company in New York State for the next five years without a sign-off from the state.
“CBS and Leslie Moonves’ attempts to silence victims, lie to the public, and mislead investors can only be described as reprehensible,” James said in a statement. “As a publicly traded company, CBS failed its most basic duty to be honest and transparent with the public and investors. After trying to bury the truth to protect their fortunes, today CBS and Leslie Moonves are paying millions of dollars for their wrongdoing. Today’s action should send a strong message to companies across New York that profiting off injustice will not be tolerated and those who violate the law will be held accountable.”
The new settlement is a sizable increase from the $14.75 million Paramount Global reported earlier Wednesday in an SEC filing and letter to the court.
In an earlier filing with the U.S. Security and Exchange Commission, Paramount Global detailed some aspects of the case. “On August 27, 2018 and on October 1, 2018, Gene Samit and John Lantz, respectively, filed putative class action lawsuits in the United States District Court for the Southern District of New York, individually and on behalf of others similarly situated, for claims that are similar to those alleged in the amended complaint described below,” it reads.
The two actions were consolidated into one on after the Court entered an order to do so on Nov. 6, 2018. The suits claimed that Moonves and other CBS executives, aware of the misconduct accusations made “false and misleading statements or fail(ed) to disclose material information.”
The statement referred to in the case paperwork involves a comment made by Moonves’ on the need to address sexual harassment issues in the Workplace at Variety’s November 2017 Entertainment and Technology Conference. Allegations against the then-CBS chief executive came to light in the New York Times and the New Yorker in the summer and fall of 2018. The lawsuits claimed that he mislead CBS shareholders with his 2017 statement because he failed to reveal his own involvement in #MeToo-type actions.
The new settlement adds to an existing $14.75 million settlement, granted preliminary approval by the Court May 13, 2022, from a class action lawsuit that awaits approval from a New York judge.
