Investor Files Derivative Lawsuit after CBS Executive Sexual Assault Allegations Hurt CBS Stock

Shareholders who lost money because of the CBS executive sexual assault scandal could be eligible to file a shareholder derivative lawsuit.

The New Yorker reported that CBS shareholders are claiming that the CBS Corporation board of directors knew that several women had made allegations that Moonves had committed sexual assault or sexual harassment months before the lurid allegations were made public.

The CBS executive sexual assault allegations and subsequent departure of executive leadership financially impacted the company, report some shareholders. If CBS shareholders believe the board of directors ignored the reports of inappropriate and potentially criminal behavior, the shareholders could file a shareholder derivative lawsuit.

A company’s board of directors is allowed to file suit against a person or company that has inflicted harm upon the company. If the board of directors fails to act in the best interest of the company and its shareholders, then the shareholders may file a lawsuit against the person or company that has inflicted such harm.

In the case of the CBS executive sexual assault allegations, the board of directors allegedly failed to adequately supervise and take action when they learned the rumored actions of its top executive were harming the company.

What’s more, Moonves is not the first to face CBS executive sexual assault allegations. Reportedly, the company fostered a corporate culture that empowered executives to prey upon employees, a demoralizing culture that could lead to instability. Wary investors would be apt to dump their shares because of the chaos of the CBS executive sexual assault scandal.

The ouster of Moonves followed the removal of longtime CBS host Charlie Rose amid allegations of sexual misconduct that became public in 2017. New allegations of similar behavior have begun swirling around Jeff Fager, executive producer of “60 Minutes” on CBS.

Lawsuit Initiated by CBS Executive Sexual Assault

The Los Angeles Times reported at least one shareholder derivative lawsuit has been filed alleging shareholders have suffered losses because of the CBS executive sexual assault allegations.

Plaintiff Gene Samit is a shareholder who says he bought 200 shares of CBS stock that were set at “artificially inflated prices” because CBS executives allegedly “made false and/or misleading statements” in their filings with the Securities and Exchange Commission because the documents did not disclose the alleged CBS executive sexual assault allegations that were known at the time.

CBS Corporation stock reportedly fell more than six percent when the CBS executive sexual assault allegations against Moonves were made public.

Samit’s shareholders derivative lawsuit seeks to represent those who have held CBS Corporation stock for four years or more.

The CBS Executive Sexual Assault Lawsuit is Gene Samit, et al., v. CBS Corporation, Leslie Moonves, and Joseph R. Ianniello, Case No. 1:18-cv-07796, in the U.S. District Court for the Southern District of New York.

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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.

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