CBS hit with shareholder class-action suit amid allegations against CEO Moonves
CBS and CEO Leslie Moonves were sued by one the network’s stockholders on Monday over the drop in the company’s share price, according to legal documents filed in a securities lawsuit.
Stockholder Gene Samit is leading the lawsuit and indicated he seeks to turn it into a class-action lawsuit for misleading investors about Moonves’s alleged misconduct.
Moonves was accused of sexual harassment and assault by multiple women in July.
“Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies,” the Monday court filing reads.
“Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) CBS executives, including the Company’s Chairman and Chief Executive Officer (‘CEO’), Defendant Leslie ‘Les’ Moonves, had engaged in widespread workplace sexual harassment at CBS; (ii) CBS’s enforcement of its own purported policies was inadequate to prevent the foregoing conduct; (iii) the foregoing conduct, when revealed, would foreseeably subject CBS to heightened legal liability and impede the ability of key CBS personnel to execute the Company’s business strategy; and (iv) as a result, CBS’s public statements were materially false and misleading at all relevant times.”
Shares of CBS fell hard on July 27, which is when the bombshell New Yorker story outlining the accusations against Moonves came out. The stock price has creeped back up a bit since then, but it’s still down about $4 per share. Samit is suing for damages and other relief.
CBS declined comment on the lawsuit.
The news comes as UltraViolet, a women’s advocacy group, wrote an open letter to the CBS board of directors demanding the network terminate Moonves while voiding his severance package, which is estimated to be as high as $200 million.
“If the CBS board gives Moonves any amount of severance in the event of his termination or resignation, you will compound the damage you’ve already inflicted on the progress towards stopping sexual violence with your decision to allow Moonves to continue working,” the letter reads.
CBS said in a July statement that it is taking the allegations “seriously” while launching its own investigation into the claims.
“All allegations of personal misconduct are to be taken seriously,” the CBS statement reads. “The Independent Directors of CBS have committed to investigating claims that violate the Company’s clear policies in that regard. Upon the conclusion of that investigation, which involves recently reported allegations that go back several decades, the Board will promptly review the findings and take appropriate action.”