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Paramount Global will pay an additional $7.25 million to shareholders to resolve the New York Attorney General’s probe into sexual misconduct allegations involving former CBS chief Leslie Moonves, and Moonves himself will pay $2.5 million.
The settlement also discloses a larger conspiracy surrounding the allegations, with a Los Angeles Police Department captain tipping off Moonves and other top executives at the company about a sexual assault allegation, and a claim that a former top CBS executive — Moonves’ communications chief Gil Schwartz — sold millions of dollars worth of shares before news of the Moonves allegations became public. (The LAPD replied in a statement that it launched “an internal investigation regarding the conduct of the retired command officer.” Police chief Michel Moore added that, “What is most appalling is the alleged breach of trust of a victim of sexual assault, who is among the most vulnerable, by a member of the LAPD.”)
The deal was referenced among a list of other litigation updates in its Nov. 2 quarterly filing with the U.S. Securities and Exchange Commission, and further details were outlined in a Wednesday letter to the New York federal judge overseeing the nearly-settled securities class action. Then, Wednesday afternoon, the office of N.Y. Attorney General Letitia James issued a press release with new details, including a further $6 million payment earmarked for “strengthening mechanisms for reporting and investigating complaints of sexual harassment and assault.”
The settlement announced by James also bars Moonves from serving as an officer or director of any company that does business in New York without first securing approval from her office.
“CBS and Leslie Moonves’ attempts to silence victims, lie to the public, and mislead investors can only be described as reprehensible,” said James in the announcement. “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.”
Earlier Wednesday, attorney Todd Cosenza wrote in a letter to U.S. District Judge Valerie Caproni, “While Defendants neither admit nor deny any liability or wrongdoing, Defendants will agree to provide additional monetary relief to be distributed as restitution to shareholders, consisting of $7.25 million from Defendant CBS Corporation and $2.5 million from Defendant Leslie Moonves, totaling $9.75 million.”
After Moonves was ousted in 2018, the CBS board retained two law firms to investigate allegations of sexual misconduct and cultural problems within the company. A few months later, in December 2018, CBS announced it had determined there were grounds to terminate Moonves for cause.
The misconduct allegations sparked a securities class action against CBS, its executives and board members, that claimed shareholders were misled about how the company handles workplace sexual harassment complaints. That litigation settled earlier this year.
“We reached an agreement with the plaintiffs to settle the lawsuit for $14.75 million, which will be paid by the Company’s insurers,” the SEC filing notes. “The settlement, which includes no admission of liability or wrongdoing by the Company, was granted preliminary approval by the Court on May 13, 2022 and is subject to final approval.”
Moonves’ $2.5 million will go to CBS shareholders, plus the additional $7.25 million from the company, making their total share of this deal and the pending settlement $24.5 million.
The company said in this and previous SEC filings that it received subpoenas or information requests from the N.Y. District Attorney’s Office, the New York City Commission on Human Rights, the state Attorney General’s office and the SEC about the matters underlying the investigation and related public disclosures.
According to the Nov. 2 filing, Paramount Global has come to a deal with the Investor Protection Bureau of the N.Y. Attorney General’s Office — with the caveat that the company admits no liability or wrongdoing and could receive additional related inquiries in the future. It states: “After credits for the settlement amount to be paid in the consolidated federal securities class action discussed above, and certain financial commitments to human resources-related programs made by CBS in connection with an earlier resolution with the Civil Rights Bureau of the New York State Attorney General’s Office, the Company has agreed to make a payment of $7.25 million, which by agreement with the Investor Protection Bureau will be distributed in connection with the federal securities class action settlement discussed above, subject to the court’s approval of the class action settlement.
“Mr. Moonves’ actions as the CEO of CBS, together with actions by other senior executives, constituted persistent and illegal conduct and violated New York’s Martin Act and other investor protection laws,” states an announcement from James’ office. In addition to the monetary deal, “every single stock trade made by a senior executive of CBS must be specifically approved by the company’s chief legal officer.”
A final approval hearing in the class action is set for Nov. 3.
“We are pleased to have reached an agreement in principle to resolve this matter concerning events from 2018 with the New York Attorney General’s office, without any admission of liability or wrongdoing,” a Paramount spokesperson told The Hollywood Reporter. “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.”
Nov. 2, 1 pm PST Headline and story updated throughout to incorporate the New York attorney general’s statements and conclusions, and the final settlement amount.
Nov. 2, 7:30 pm PST Updated with a statement from the Los Angeles Police Department.
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