Paramount Global and former CBS chief Leslie Moonves have reached a settlement with New York state as part of an investigation that uncovered new allegations of a cover-up and insider stock sales within CBS as sexual misconduct accusations against Moonves began to come to light in 2017 and 2018.
The deal calls for Paramount Global, the parent company of CBS, to pay a total of about $22 million to be redistributed to shareholders, while another $2.5 million is to come from Moonves, who was terminated as chairman-CEO in September 2018. The settlement with the Attorney General’s Investor Protection Bureau related to class-action shareholder lawsuits and litigation asserting that Moonves and key CBS executives mislead executives by not disclosing Moonves’ vulnerabilities to explosive #MeToo allegations.
The details disclosed Nov. 2 by New York Attorney General Letitia James paint a damning picture of CEO who knew he was vulnerable to #MeToo allegations but was desperate hang on to power. The settlement brings to a close two class-action lawsuits filed in 2018 that were previously settled but re-opened by James as part of her broader investigations into complaints at CBS Corp., which is now part of Paramount Global.
“CBS and Leslie Moonves’ attempts to silence victims, lie to the public, and mislead investors can only be described as reprehensible,” said 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.”
Moonves declined to comment through a spokesman. Paramount Global emphasized that the matter involved the previous regime at a much-changed company. As part of the settlement, Moonves is also barred from serving as an officer of a public company doing business in New York without approval from the Attorney General.
“We are pleased to resolve this matter concerning events from 2018 with the New York Attorney General’s office, without any admission of liability or wrongdoing,” Paramount said. “The matter involved alleged misconduct by CBS’s former CEO, who was terminated for cause in 2018, and does not relate in any way to the current company.”
The paperwork about the case was disclosed as part of Paramount Global’s third-quarter earnings report released Nov. 2. A mention of a portion of the Moonves-related settlement with New York state was included in the company’s early-morning 8K earnings filing with the Security and Exchange Commission. A $14.7 million settlement related to the filing related to the long-running class-action litigation filed around the controversy that ended Moonves’ 23-year tenure at CBS. The additional payments come as part of a settlement with the Investor Protection Bureau of New York State Attorney General’s Office.
Two federal lawsuits, filed in the Southern District of New York, were consolidated into one in late 2018. In 2019, a judge dismissed part of the suit against Moonves, former CBS executives and members of its board of directors.
But Moonves’ comment on the need to address sexual harassment issues in the workplace at Variety‘s Entertainment and Technology conference in November 2017 became problematic for the company as the lawsuits claimed the then-CBS chief executive mislead shareholders by not disclosing his own vulnerablity to #MeToo-type allegations. Those allegations made international headlines in the late summer and fall of 2018 through several exposes in the New Yorker and by the New York Times.