Paramount Global and former CBS chief Leslie Moonves have agreed to resolve lingering shareholder claims over the company’s handling of past allegations of sexual harassment.
Paramount, formerly known as ViacomCBS, disclosed the settlement Wednesday in a regulatory filing, saying it agreed to pay $7.25 million to the Investor Protection Bureau of the New York state attorney general’s office.
Moonves separately will contribute $2.5 million to settle the matter. The company also said its insurance provider will resolve a separate $14.75-million class-action lawsuit.
Wednesday’s disclosure suggests the company is trying to close a troubling chapter that destroyed Moonves’ career and triggered the company’s eventual merger with Viacom.
“We are pleased to have reached an agreement in principle to resolve this matter concerning events from 2018 with the New York attorney general’s office, without any admission of liability or wrongdoing,” a Paramount spokesman said in a statement.
The New York attorney general’s probe was one of several open investigations into how CBS handled the fallout of the 2018 sexual harassment scandal, which began with allegations that Moonves had sexually abused women in the 1980s and 1990s. Moonves denied the allegations.
Investigative reporter Ronan Farrow’s report, contained in the New Yorker magazine, prompted swift action. CBS’ board hired two prominent law firms to investigate Moonves and the company’s culture. The board then fired Moonves on Sept. 9, 2018.
A group of shareholders also sued, alleging the scandal was destroying the value of their holdings. New York agencies, including the New York City Commission on Human Rights and the New York County district attorney, quickly opened inquiries. The CBS controversy erupted nearly 10 months after the Harvey Weinstein scandal was exposed, sparking the #MeToo uprising among women who demanded greater accountability.
Paramount has been looking to settle the shareholders’ lawsuits. In 2018, shareholders Gene Samit and John Lantz, among others, filed class-action lawsuits in the U.S. District Court for the Southern District of New York. A judge later consolidated the various lawsuits into one, with the lead plaintiff being the Construction Laborers Pension Trust for Southern California.
Investors alleged multiple federal securities law violations, including that executives made “materially false and misleading statements” and that the company failed to disclose key information to investors.
“With the exception of one statement made by Mr. Moonves at an industry event in November 2017, in which he allegedly was acting as the agent of CBS, all claims as to all other allegedly false and misleading statements were dismissed,” Paramount said in its filing.
The company eventually agreed to settle with the plaintiffs “for $14.75 million, which will be paid by the company’s insurers,” according to the filing. The settlement was approved by a judge May 13 and is pending final approval.
The attorney general’s office stepped in on behalf of New York shareholders.
“Defendants will agree to provide additional monetary relief to be distributed as restitution to shareholders, consisting of $7.25 million from Defendant CBS Corporation and $2.5 million from Defendant Leslie Moonves, totaling $9.75 million,” Paramount attorney Todd G. Cosenza wrote in a letter to the judge.
