NEW YORK (1010 WINS) — Former CBS President and Chief Executive Officer Les Moonves and CBS will have to pay $30.5 million after an investigation by the attorney general’s office found CBS leadership concealed sexual assault allegations, misled investors and participated in insider trading.
The attorney general’s office found that CBS and senior leadership knew about the multiple allegations of sexual assault against Moonves and intentionally hid it from regulators, shareholders, and the public for months.
Right before the allegations became public, another CBS senior executive who knew about the allegations sold millions of dollars of CBS stock, the investigation also revealed.
“CBS and Leslie Moonves’ attempts to silence victims, lie to the public, and mislead investors can only be described as reprehensible,” said Attorney General Letitia James. “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.”
A captain at the Los Angeles Police Department for months shared confidential information with Moonves and other senior executives at CBS. Text messages revealed the LAPD captain showed the group the unredacted police report and kept them updated with the case. In one instance, Moonves said “Hopefully we can kill media from PD. Then figure [sic] what [Complainant #1] wants.”
The LAPD captain’s interference continued over the course of several months with the officer claiming he had spoken to his contacts within the LAPD and instituted controls to prevent news of the police report from leaking to the press from the police. He also said that “although it’s not 100% Confidential as we have to bring the [district attorney] into the picture, I think at this point CBS should feel better than they did last week. The key is that NO other accusers come forward.”
When the allegations finally became public and Moonves resigned from CBS, the LAPD captain sent a text message to the CBS executive which read “We worked so hard to try to avoid this day. I am so completely sad.”
The captain also wrote to Moonves saying, “I’m deeply sorry that this has happened. I will always stand with, by and pledge my allegiance to you.”
Despite the ongoing investigation of the allegations, the company continued to withhold the information from the public, which the AG’s office constitutes as insider trading and violated state laws meant to protect investors.
CBS’s former Chief Communications Officer, Gil Schwartz, was one of the few people who knew about the allegations against Moonves as well as the LAPD police report. Just before the news broke, the company allowed Schwartz to see his stock shares. He ended up selling 160,709 shares of CBS stock at an average weighted price of $55.08 for a total of $8,851,852 six weeks before the article about Moonves broke. The stock dropped 10.9% from the day before the news went public to the trading day after.
The majority of the $30.5 million will be returned to CBS shareholders. The company will also be required to reform its HR practices around sexual harrassment, including reporting and training as well as provide biannual reports to the AG’s office.
Moonves will also have to get written approval from the AG’s office before accepting another executive or officer position at a public company doing business in New York for next five years as part of the settlement.
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