NEW YORK—Paramount Global and former CBS chief Leslie Moonves have agreed to pay a $30.5 million fine for concealing sexual assault allegations against Moonves, misleading investors about those allegations, and insider trading, according to New York Attorney Letitia James, who initiated an investigation following multiple allegations that surfaced in 2018 that led to Moonves resignation from Viacom/CBS (which has since been rebranded as Paramount Global).
CBS will have to pay $28 million, $22 million of which will go back to CBS shareholders and $6 million to strengthening mechanisms for reporting and investigating complaints of sexual harassment and assault. In addition, every single stock trade made by a senior executive of CBS must be specifically approved by the company’s chief legal officer. Moonves is being fined $2.5 million which will also go to CBS shareholders. In total, CBS shareholders will receive $24.5 million. Additionally, for the next five years, Moonves may not serve as an officer or director of any public company doing business in New York without written approval by the Office of Attorney General.
In the investigation, the Attorney General found that CBS and its senior leadership knew about multiple allegations of sexual assault made against Moonves and intentionally concealed those allegations from regulators, shareholders, and the public for months. The investigation also revealed that another senior executive at CBS — one of the few people who knew about the allegations — sold millions of dollars of CBS stock in the weeks before the allegations became public.
These actions constituted insider trading and violated New York’s investor protection laws, James said.
“CBS and Leslie Moonves’ attempts to silence victims, lie to the public, and mislead investors can only be described as reprehensible,” she said. “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.”
The Attorney General says that when CBS and Moonves became aware of several sexual allegations against Moonves, they both attempted to keep the accusations hidden, working with the Los Angeles Police Dept.—which had opened an investigation after receiving a complaint about sexual assault from Moonves—to interfere in the investigations by sharing confidential information with Moonves and other CBS executives.
“Over the course of several months, the LAPD captain continued to secretly provide Mr. Moonves and CBS executives with status updates on the LAPD’s investigation,” the Attorney General said. “The LAPD captain made it clear that he was willing to intervene on Mr. Moonves’ behalf and Mr. Moonves solicited his assistance.”
“When the allegations finally became public and Mr. Moonves resigned from CBS, the LAPD captain sent a text to the executive saying, ‘We worked so hard to try to avoid this day. I am so completely sad,’” James added.
Regarding the insider trading accusations, James said Chief Communications Officer Gil Schwartz—who was one of the few people with information about the allegations and the LAPD police report—sold more than 106,000 shares of CBS stock six weeks before the first article alleging Moonves' sexual assault accusations became public, earning him nearly $9 million. The stock dropped 10.9% from the day before the news broke to the trading day after.
The agreement also requires CBS to survey its employees annually about the work climate within CBS, submit its sexual harassment training to OAG for review, enhance its outreach and recruitment efforts to hire more women at all levels of management, and financially commit to fund human resources reforms within CBS, James said.
