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CBS, Moonves must pay $30.5 million for insider trading

The move is part of an agreement with the New York attorney general's office.
Julie Chen, Leslie Moonves
Posted at 3:58 PM, Nov 02, 2022
and last updated 2022-11-02 18:58:04-04

NEW YORK (AP) — CBS and its former president, Leslie Moonves, will pay $30.5 million as part of an agreement with the New York attorney general's office, which says the network's executives conspired with a Los Angeles police captain to conceal sexual assault allegations against Moonves.

Under the deal announced Wednesday by Attorney General Letitia James, the broadcast giant is required to pay $22 million to shareholders and another $6 million for sexual harassment and assault programs. Moonves will have to pay $2.5 million, all of which will benefit stockholders who the attorney general said were initially kept in the dark about the allegations.

At least one of those executives — one of the few privy to an internal investigation — sold millions in dollars of stock before the allegations against Moonves became public, which the attorney general's office said amounted to insider trading.

"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," James said in a statement, calling attempts to mislead investors "reprehensible."

A spokesperson for Paramount Global, which owns CBS, said it was "pleased to resolve this matter ... without any admission of liability or wrongdoing," adding that the "matter involved alleged misconduct by CBS's former CEO, who was terminated for cause in 2018, and does not relate in any way to the current company."

Moonves resigned from CBS on Sept. 9, 2018.

In a document outlining the findings of its investigation, the attorney general's office detailed an alleged scheme by a Los Angeles police captain to try to cover up the allegations against Moonves.

The police captain, who was not named in the report, tipped off CBS that a woman had lodged a complaint against Moonves in the Los Angeles Police Department's Hollywood division.

The captain then met personally with Moonves and another CBS executive and fed them confidential information about the investigation. The captain instructed the police officers investigating the complaint to "admonish" the woman not to go to the media with her allegations, according to the attorney general's office.

When the allegations ultimately became public anyway and Moonves resigned, the captain sent a note to a CBS contact saying, "We worked so hard to try to avoid this day."

He also wrote a note to Moonves saying, "I'm deeply sorry that this has happened. I will always stand with, by and pledge my allegiance to you."

The attorney general's office said it uncovered text messages between the police captain, CBS executives and Moonves that showed efforts to prevent the complaint from becoming public.

The LAPD did not immediately have a comment Wednesday but a spokesperson said the agency was looking into the allegations.

Moonves' resignation came amid complaints from multiple women about alleged sexual misconduct. Some accusers claimed that Moonves had forced them to perform oral sex. The New Yorker had reported at the time that at least one of the women, a television executive, had filed a criminal complaint with Los Angeles police.

Moonves acknowledged having relations with three of the women, but said they were consensual. He denied attacking anyone, saying in a statement at the time that "Untrue allegations from decades ago are now being made against me."

CBS is also required under the deal with the attorney general's office to reform its human resources practices around sexual harassment.