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Gene Samit, represented by the firm of Pomerantz LLC, is suing in New York federal court with the contention that CBS promulgated its ethical standards in proxy statements and then failed to disclose information that would have a material impact on its business.
The complaint alleging securities violations comes a month after The New Yorker published a big story that detailed how Moonves allegedly made unwanted sexual advances on several women in the industry. The July 27 report immediately sent the company’s share price tumbling and has triggered an investigation now being handled by two outside law firms.
Samit seeks to represent a class of CBS stockholders who purchased securities in the four years prior to the New Yorker story and points to a 2014 proxy statement that included the company’s standards for ethical conduct. CBS directors had to certify certain things, according to the complaint, including a commitment to providing a bias-free and harassment-free workplace environment.
A 2016 letter from Moonves himself, directing employees to commit to a harassment-free workplace among other things, is also quoted in the lawsuit. He wrote that CBS “is known for the quality of its people, the content it creates and distributes around the globe and the integrity of its business practices.”
Other proxy statements to the SEC also get attention, including ones stating that the loss of key personnel could disrupt the management or operations of the company’s business and adversely affect its revenues.
The lawsuit alleges that CBS, Moonves and COO Joseph Ianniello “made false and/or misleading statements and/or failed to disclose that: (i) CBS executives, including the Company’s CEO, Defendant 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.”
Samir seeks an unspecified amount of monetary damages and further relief.
CBS declined comment.
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