A CBS shareholder has launched a class-action suit against the broadcaster tied to the sexual harassment scandal involving several top executives -- including chairman and CEO Les Moonves -- claiming the company knew enforcement of its employee conduct standards was inadequate years before the most recent claims came to light.
News of the suit was first reported by The Hollywood Reporter.
In July, TheNew Yorker reported that several CBS executives had sexually harassed, abused and assaulted female employees at the network over a period of years. One of the allegations was brought by actress and producer Illeana Douglas, who claimed that several years ago Moonves terminated a development deal she had with the network after she rebuffed his advances. In a statement in the New Yorker article, Moonves said there may have been times “decades ago” when he may have made some women uncomfortable by making advances, but that he has always adhered to the principle that “no means no” and that he has never misused his position to “harm or hinder anyone’s career.” CBS said it is conducting an investigation into the allegations and has hired two outside law firms to lead the probe.
News of the allegations played havoc with CBS’ stock price -- it fell 6% after the New Yorker article broke on July 27 and has been down another 1% since that date. That decline in stock price has hit investors hard, the suit claims.
In the suit, filed in U.S. District Court for the Southern District of New York on Aug. 27, CBS shareholder Gene Samit pointed to company proxy statements filed over the past four years where CBS outlines its employee conduct code. Samit, who is seeking other CBS shareholders who have bought stock since 2014 to join him, says CBS’s board of directors certified its commitment to a bias-free and harassment-free workplace as part of those filings, when it knew it wasn't providing a safe environment for all employees.
In addition, Samit, who is seeking unspecified damages, claims that CBS, Moonves and chief operating officer Joseph Ianniello made false and misleading statements and failed to disclose that executives, including Moonves, were engaging in widespread sexual harassment and that its enforcement policies to stop such action was inadequate.
“...The foregoing conduct, when revealed, would foreseeably subject CBS to heightened legal liability and impede the ability of key CBS personnel to execute the company’s business strategy," the suit states.
CBS declined to comment.
