CBS parent Paramount Global has 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.
According to Reuters, lawyers for Paramount Global, Moonves and the plaintiffs filed a proposed settlement agreement in Manhattan federal court on Friday. CBS and Moonves have denied that they misled investors.
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.
Although the former CEO has denied wrongdoing and said the relationships were consensual, he was ousted from CBS in September 2018.
Two months later, CBS said it had fired him for cause and denied a $120 million severance package, following a board review of the findings of an investigation into Moonves’ conduct and the network’s culture led by two law firms hired by CBS.
CBS and lawyers for Moonves did not immediately respond to requests for comment, nor did the plaintiffs’ lawyers at Robbins Geller Rudman & Dowd, Reuters said.
In 2018, a group of CBS shareholders filed a class-action lawsuit accusing CBS and Moonves of misleading investors by not initially disclosing claims against the CEO and making public statements in support of #MeToo.
For example, according to Reuters, Moonves at a 2017 industry conference called #MeToo “a watershed moment” and said, “I think it’s important that a company’s culture will not allow for this … There’s a lot we didn’t know.”
In 2020, US District Judge Valerie Caproni in Manhattan found that statement was the only one cited by the plaintiffs that could have misled investors, and she dismissed all other claims.
Around the time of the suit, there was much buzz that CBS was set to merge with sister company Viacom. That deal was announced in August 2019 and closed in December, creating ViacomCBS, home to Paramount Pictures, MTV, CBS and Showtime. The media conglomerate was renamed Paramount Global in February.