CBS Settles Investor Class Action for $14.7M

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CBS Les Moonves Sexual Misconduct Class Action Settlement Overview: 

• Who: CBS Corporation agreed to a $14.7 million settlement with the Construction Laborers Pension Trust for Southern California on behalf of investors.
• Why: Investors claim CBS and its former CEO Les Moonves misled investors and artificially inflated its stock price by claiming they were in support of the #MeToo movement despite later being accused of decades of sexual harassment in the workplace. 
• Where: The class action lawsuit was filed in New York federal court.

CBS Corp. has agreed to pay $14.7 million to end claims from investors that sexual misconduct allegations surrounding its CEO Les Moonves sunk its stock price. 

The settlement agreement will provide investors with between 7% and 9% of what they estimated they could have reasonably recovered, according to a motion for preliminary approval filed Apr. 15.

“Lead plaintiff’s percentage recovery is even higher under defendants’ view of damages, which would limit any potential recovery to losses incurred on July 27, 2018, only,” the investors told Law 360. “This is a very good result, especially when compared to the median percentage recovery in securities class actions in 2021 of 1.8%.” 

Investors argued in a 2018 class action lawsuit that they were misled after Moonves said during a 2017 speech at a Variety event that he was in support of the #MeToo movement and called it a “watershed moment,” Law360 reports. 

CBS Artificially Inflated Stock Price With #MeToo Support, Investor Class Action Claims

The 2017 speech, investors argue, artificially inflated CBS’ stock price since reports accusing Moonves of decades of alleged workplace sexual misconduct would later come out in the New York Times and New Yorker in July 2018.

The revelations caused Moonves to resign from CBS but also sunk the company’s share price, according to the CBS class action. 

Much of the CBS class action was dismissed in the beginning of 2020; however, the claims based on Moonves’ comments at the Variety event were upheld after the judge ruled investors adequately pled the former CEO had implied he did not know about any problems of sexual misconduct at the company, Law360 reports. 

Plaintiff Construction Laborers Pension Trust for Southern California filed for class certification in August 2020 on the claims that were upheld, but Law360 reports CBS and Moonves fought against it.

If preliminary approval for the settlement is granted, the resulting certified class would consist of thousands of CBS investors who bought stock in the company between November 2017 and July 2018, according to investors. 

CBS reached a separate settlement last year with advertisers who claimed the company conspired with others to artificially inflate the price for advertising with the network. 

Were you financially injured after sexual misconduct allegations came out against CBS’ former CEO Les Moonves? Let us know in the comments! 

The plaintiffs are represented by Samuel H. Rudman, Vincent Serra, Spencer Burkholz, Jonah H. Goldstein, Laurie L. Largent and Laura Andracchio of Robbins Geller Rudman & Dowd LLP.

The CBS Les Moonves Sexual Misconduct Class Action Lawsuit is Construction Laborers Pension Trust for Southern California, et al. v. CBS Corporation, et al., Case No. 1:18-cv-07796, in the U.S. District Court for the Southern District of New York.

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