Paramount, Leslie Moonves Pay $30.5 Million to Settle NY AG Allegations

Leslie 'Les' Moonves, president and chief executive officer of CBS Corporation, attends the third day of the annual Allen & Company Sun Valley Conference, July 13, 2017 in Sun Valley, Idaho.
(Image credit: Drew Angerer/Getty Images)

Paramount Global and former CBS chief Leslie Moonves have agreed to pay $30.5 million to settle allegations of insider trading and trying to hide sexual assault allegations, according to Attorney General Letitia James.

Moonves has to pay $2.5 million, which will be divvied up by CBS shareholders. Those shareholders will also get $24 million from Paramount, with the other $6 million going to "strengthening mechanisms for reporting and investigating complaints of sexual harassment and assault."

In addition, any stock trade by a senior Paramount executive will have to be approved by its chief legal officer.

Since the allegations against Moonves were first reported, former CBS parent ViacomCBS changed its name to Paramount Global.

The settlement is a result of an investigation by James' office (opens in new tab) that concluded CBS and top leadership knew of the sexual assault allegations against Moonves and hid them from "regulators, shareholders, and the public," with the help of an L.A. police department captain who tipped them off to a confidential sexual assault complaint and helped keep it from being made public.

James also said that a senior executive -- whom she identified as former Chief Communications Officer Gil Schwartz, had sold millions of dollars of CBS stock before the allegations were eventually made public, which she said constituted insider trading.

"Six weeks before the first article about the allegations became public, Mr. Schwartz sold 160,709 shares of CBS stock at an average weighted price of $55.08 for a total of $8,851,852. The stock dropped 10.9% from the day before the news broke to the trading day after," she said.

Also as part of the settlement, CBS has to institute harassment training and revamp its HR, providing biannual reports to the attorney general's office.

“CBS and Leslie Moonves' attempts to silence victims, lie to the public, and mislead investors can only be described as reprehensible,” said James. “As a publicly traded company, CBS failed its most basic duty to be honest and transparent with the public and investors."

She called CBS's and Moonves' actions "persistent and illegal conduct" that broke investor protection laws.

"We are pleased to resolve this matter concerning events from 2018 with the New York Attorney General’s office, without any admission of liability or wrongdoing," said CBS parent Paramount Global. "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." ■

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.