CBS and its former Chief Executive Officer Leslie Moonves have been ordered to pay $30.5 million dollars — mostly to shareholders — for insider trading and covering up multiple sexual assault allegations against Moonves, New York Attorney General Letitia James announced on Wednesday.
CBS, now part of Paramount Global, is required to redistribute $22 million to its shareholders while Moonves, who resigned from CBS in 2018, must pay shareholders another $2.5 million. CBS is also required to spend $6 million to reform its Human Resources practices regarding sexual harassment and must provide biannual reports to the attorney general’s office.
“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.”
In 2018, at the height of the #MeToo movement, Moonves was accused by more than a dozen women of sexual misconduct, including exposing himself and pressuring women for sex. Despite denying any wrongdoing and claiming the relationships were consensual, he was ousted from CBS in September 2018.
According to the AG’s office, a Los Angeles Police Department captain provided CBS executives with a confidential sexual assault complaint against Moonves in 2017 — months before the allegations became public.
The same day the sexual assault complaint was filed at a Hollywood LAPD station, the unnamed police captain shared an unredacted police report with a CBS executive, who later shared it with Moonves and other executives as they prepared for the fallout of the accusations going public.
The OAG uncovered text messages exchanged between the police captain, a CBS executive and Moonves that showed the executive asking about the accuser’s motivation and what she planned to do next.
“Hopefully we can kill media from PD. Then figure [sic] what [Complainant #1] wants,” Moonves wrote in a text, according to James.
Over the next several months the LAPD captain secretly updated CBS executives on the department’s investigation and even met with Moonves in person. He told the executives that he had spoken to his contacts within the department to stop the police report from being leaked.
“Although it’s not 100% Confidential as we have to bring the [district attorney] into the picture, I think at this point CBS should feel better than they did last week. The key is that NO other accusers come forward,” the captain said.
When the allegations became public and Moonves resigned from CBS, the LAPD captain sent a text to the executive saying, “We worked so hard to try to avoid this day. I am so completely sad.”
After learning about the sexual assault allegations against him, Moonves made several deceiving statements to the public and to regulators, including claiming at a public event that he was unaware of any workplace harassment issues.
Additionally in CBS’ annual filing with the Securities Exchange Commission, the company stated under “risk factors” that its business “depends upon the continued efforts, abilities, and expertise of its chief executive officer and other key employees” with no mention that Moonves position as CEO was in jeopardy.
While CBS worked to cover up the allegations, it allowed Former Chief Communications Officer Gil Schwartz — who was one of the few who knew about the police report — to sell his shares of the company six weeks before Moonves’ alleged sexual assault was first reported in the news.
Schwartz sold 160,709 shares of CBS stock at an average weighted price of $55.08 for $8,851,852. The stock plummeted 10.9% from the day before the news broke to the next trading day.
“Mr. Moonves’ actions as the CEO of CBS, together with actions by other senior executives, constituted persistent and illegal conduct and violated New York’s Martin Act and other investor protection laws,” the OAG said.
Wednesday’s settlement concludes two class-action lawsuits filed in 2018 accusing CBS and Moonves of misleading investors by not disclosing claims against the CEO and making public statements in support of #MeToo.
In April, CBS agreed to pay $14.75 million to shareholders who claimed that the media giant’s failure to disclose sexual misconduct allegations against former CEO Les Moonves “artificially inflated” the value of its stock.
In addition to the hefty settlement, every single stock trade made by a senior executive of CBS must be specifically approved by the company’s chief legal officer, according to the OAG.
Also, Moonves must receive written approval from the Attorney General before he can accept an executive or officer position at a public company doing business in New York for the next five years.
CBS merged with sister company Viacom in 2019 creating ViacomCBS — home to Paramount Pictures, MTV, CBS and Showtime. The media conglomerate was renamed Paramount Global in February.