CBS Shareholders Say Board Decisions Caused Stock Drop After Les Moonves Sexual Conduct Scandal

CBS shareholders say that poor decisions on the part of the board of directors caused the company’s stock to drop following accusations that Board Chairman and CEO Les Moonves had committed sexual assault and harassment.

According to a report by The New Yorker, CBS shareholders believe that the board of directors knew that women had come forward accusing Chairman and CEO Les Moonves of sexual harassment and sexual assault, but did not take action before the news went public.

Scandals such as these can affect a company’s financial health, and subsequently, take a toll on shareholders’ profits. If shareholders think that the company is failing to make a legal claim that could result in compensation for the losses, those shareholders may file a shareholder derivative lawsuit.

Shareholders own stock in a company, so they are part owners of the company. Board members are shareholders elected by others to make decisions for the company and ensure its health. So, a board of directors is accountable to the other shareholders, and is tasked with making decisions in the best interest of the company and the best financial interests of the shareholders.

In the case of CBS, the announcement that Moonves was accused of sexual assault and harassment was followed by a drop in stock value. In fact, the very day that news broke about the Ls Moonves sexual assault scandal, CBS stock fell 6.12 percent, according to the Los Angeles Times.

Shareholders have already filed one shareholder derivative lawsuit, saying that “CBS’s enforcement of its own purported policies was inadequate to repent the foregoing conduct.” The plaintiffs claim that the company failed to comply with its own anti-harassment polices in connection with Moonves’ behavior.

Accusations against Moonves became widely publicized in July 2018, when six women allegedly claimed that Moonves had sexually assaulted or harassed them. In September, additional allegations against the CEO came to light.

After the second wave of allegations was revealed, CBS announced that Moonves would be stepping down. Shareholders in the CBS shareholder derivative lawsuit say that the company’s board knew about the allegations before the stories went public, and should not have waited until September to take action.

Allegedly, a woman filed a criminal complaint with the Los Angeles Police Department in 2017, saying that Moonves sexually assaulted her. The LAPD said that though the allegations were credible, the statute of limitations had passed on the alleged crimes, so no legal action could be taken against Moonves on that issue.

Moonves allegedly knew about the LAPD investigation, and told some board members about the issue. This supposedly took place before the news broke in September 2018.

The shareholders say that other media companies have responded more appropriately to allegations against executives. Unfortunately, Les Moonves’ case is not the first time that the company has had to deal with allegations of sexual misconducts by high-level employees. In 2017, Charlie Rose was fired from CBS after multiple people accused him of sexual misconduct. Now, the executive producer of “60 Minutes,” Jeff Fager, faces similar accusations.

Join a Free CBS Shareholder Lawsuit Investigation

Current CBS shareholders, especially those who have held shares for four years or more, may be eligible for compensation if their stocks took a hit around the time the Les Moonves sexual misconduct allegations were made public.

Learn More