CBS shareholders have reached a $14.75 million settlement in their securities lawsuit against Leslie Moonves and the network regarding how it dealt with the sexual misconduct allegations against the disgraced former chairman-CEO and how his previous #MeToo comments affected the company’s financial performance.
In a legal filing obtained by Variety on Monday, investors in CBS Corp. — which now, re-merged with Viacom, is called Paramount — wrote, “Lead Plaintiff and Defendants have negotiated, at arm’s length and with the assistance of an experienced and neutral mediator, a proposed settlement of all claims in this Action for $14,750,000 in cash. This resolution, which falls well within the range of possible approval, involved a thorough investigation, extensive motion practice, consultation with an expert on damages and loss causation, and a formal mediation involving rigorous and extensive negotiations.”
Representatives for CBS declined to comment on Monday.
The initial lawsuit was filed in August 2018, one month before Moonves stepped down from his longtime post at CBS after more than a dozen women accused him of sexual harassment. He has denied the allegations.
The CBS investors alleged in their suit that “throughout the putative class period, September 26, 2016 through December 4, 2018, inclusive, Defendants and Former 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.”
In January 2020, a federal judge in New York allowed the shareholder lawsuit against CBS Corp. to proceed based on the specificity of statements made by Moonves at a 2017 Variety conference. Judge Valerie Caproni of the Southern District of New York dismissed other claims in the securities fraud suit against CBS Corp. that asserted that CBS’ top leaders and board members should have known and acted on rumors of sexual misconduct allegations against Moonves as part of their fiduciary duty to protect the company controlled by Shari Redstone.
But Caproni allowed the suit to proceed based on statements Moonves made about the #MeToo movement and the then-recent firing of “CBS This Morning” host Charlie Rose after numerous women came forward with allegations of misconduct, some of which involved employees of his now-defunct PBS interview series “Charlie Rose.”
At Variety‘s November 2017 Innovate summit held in Los Angeles, Moonves spoke with now-co-editor-in-chief, then-business editor Cynthia Littleton about the state of the company, a conversation that included a discussion of the #MeToo movement and the allegations that led to Rose’s abrupt removal from “CBS This Morning.”
Moonves asserted that the shocking allegations then unfolding against Harvey Weinstein — the convicted movie mogul now in the midst of a criminal trial on sexual assault charges — and Rose had led the industry to “a watershed moment” and that “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.”
The judge ruled that Moonves’ statements at Variety‘s conference crossed the line because the executive must have known at the time that serious allegations of sexual misconduct from his past could easily surface.
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