CBS Faces Securities Class Action Over Moonves Sexual Harassment Allegations
The media company allegedly made misleading statements about the integrity of its zero tolerance sexual harassment policy after recent claims were raised against CEO Leslie Moonves and others.
August 28, 2018 at 04:10 PM
3 minute read
A new securities class action suit against CBS alleges the media company failed to enforce its own sexual harassment policies in dealing with CEO Leslie Moonves, who was accused of sexual harassment by six women in an article published in The New Yorker magazine.
After the article was published, CBS' stock price fell more than 6 percent, causing “significant losses and damages” to the potential class members.
A spokeswoman for CBS declined to comment on the lawsuit.
The complaint pointed to CBS' filings with the U.S. Securities and Exchange Commission, affirmatively declaring all its directors and employees upheld its business code of conduct that included “a bias-free and harassment-free workplace.” Moonves himself issued a letter in 2016 that the complaint quotes, noting CBS' commitment to “maintaining the highest standards in everything” the company did, which was guided by “a strong and established ethical code.”
That “zero tolerance” policy specifically stated that CBS take all steps necessary and appropriate to stop harassment and discrimination when it becomes aware of allegations.
Despite repeatedly filing public statements asserting as much, the suit claimed these statements were materially false and misleading. Quoting news reports, including The New Yorker piece, the complaint alleged that during the relevant time period CBS and its top executives know about sexual harassment allegations against Moonves and others, some of which went back decades. CBS' enforcement of its own policies was inadequate to prevent the conduct, and, when it became public, would “foreseeably subject CBS to heightened legal liability and impede the ability of key CBS personnel to execute the company's business strategy,” the complaint alleged.
The New Yorker article includes four on-the-record allegations against Moonves, including one by actress Illeana Douglas. She claimed Moonves violently kissed her while holding her down during a 1997 meeting. She went on to describe the “physicality” of the assault as “horrendous.”
Three other women, a writer and two producers, allege in the article that Moonves also made unwanted and aggressive sexual advances towards them, including other claims of forcible kissing and withdrawn work opportunities after inappropriate dinner requests were denied. Other members of CBS' executive team are also alleged to have engaged in sexual harassment.
CBS has reportedly begun an internal investigation into the allegations. O'Melveny & Myers partner Daniel Petrocelli has reportedly been retained by Moonves as counsel during the internal probe.
Pomerantz LLP co-managing partner Jeremy Lieberman filed the class action against CBS. Neither he nor a firm spokesman responded to a request for comment.
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