UPDATING with details from New York Attorney General’s Office settlement.
Paramount Global and former CBS chief Leslie Moonves have reached a $30.5 million 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 $28 million while another $2.5 million is to come from Moonves, who was terminated as chairman-CEO in September 2018. The settlement 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 bulk of the settlement will be distributed to CBS shareholders to settle two class-action lawsuits filed in 2018.
“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.”
The paperwork about the case was disclosed in a Security and Exchange Commission 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.