Updated story: Per a release from the office of New York Attorney General Letitia James, Leslie Moonves and Paramount Global’s combined pay out to CBS shareholders for sexual misconduct claims and insider trading is now $24.5 million.
Attorney General James secured a total $30.5 million from the former CBS President and Chief Executive Officer and his network Wednesday, citing the concealment of sexual assault allegations against Moonves, misleading investors about those allegations and insider trading.
In the latter case, former Chief Communications Officer Gil Schwartz sold millions of dollars’ worth of stock in the network after a tip from a captain a the Los Angeles Police Department (LAPD) informed him, Moonves and other executives of the confidential sexual assault complaint against the CEO. Together, network executives and the LAPD captain worked for months to keep the assault allegations from becoming public before Schwartz sold his stock in the weeks leading up to the fallout.
Per the NY Attorney General’s release, in addition to the $30.5 million payout, a majority $24.5 million of which will go to CBS shareholders, the network will mandatorily reform HR protocol around sexual harassment and provide biannual reports back to the Office of the 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 OAG.
“CBS and Leslie Moonves’ attempts to silence victims, lie to the public, and mislead investors can only be described as reprehensible,” said Attorney General James 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 NY Attorney General’s deal is a sizable increase from the $14.75 million Paramount Global reported earlier Wednesday in an SEC filing and letter to the court.
Original story below:
Leslie Moonves and Paramount will have to pay $9.75 million to CBS shareholders over sexual misconduct claims as a result of a deal made with the New York Attorney General.
The U.S. Security and Exchange Commission website details activities and timelines of the case with paperwork filed Wednesday by Paramount Global.
“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.
“This action seeks to recover damages arising during this time period allegedly caused by the defendants’ purported violations of the federal securities laws, including by allegedly making materially false and misleading statements or failing to disclose material information, and seeks costs and expenses as well as remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On April 12, 2019, the defendants filed motions to dismiss this action, which the Court granted in part and denied in part on January 15, 2020,” the document continues. “With the exception of one statement made by Mr. Moonves at an industry event in November 2017, in which he allegedly was acting as the agent of CBS, all claims as to all other allegedly false and misleading statements were dismissed.”
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.
In a letter to US District Judge Valerie Caproni, attorney Todd Cosenza, “While Defendants neither admit nor deny any liability or wrongdoing, Defendants will agree to provide additional monetary relief to be distributed as restitution to shareholders, consisting of $7.25 million from Defendant CBS Corporation and $2.5 million from Defendant Leslie Moonves, totaling $9.75 million.”
This deal adds to the 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.