CBS.WD Cbs Corp.

By Joe Flint 

Several current and former CBS Corp. executives engaged in insider trading in advance of sexual-harassment allegations against former Chairman and Chief Executive Leslie Moonves becoming public, according to a shareholder lawsuit seeking class-action status against the company.

Mr. Moonves, acting CEO Joe Ianniello, chief accounting officer Lawrence Liding and former communications chief Gil Schwartz collectively sold more than 3.4 million shares worth over $200 million before the company's July disclosure that it would investigate Mr. Moonves, according to an amended complaint filed Monday in federal court in the Southern District of New York by the Construction Laborers Pension Trust for Southern California.

The timing and amount of the sales, the suit said, "were unusual and suspicious" and demonstrate a motive to commit fraud. According to the suit, Mr. Moonves sold stock valued at $155.3 million between June 2017 and May of 2018. During that time, the suit said, CBS was aware of media inquiries about sexual-harassment allegations against Mr. Moonves, who resigned in September.

Besides Mr. Moonves and CBS, the defendants include Shari Redstone, a vice chair of CBS and president of National Amusements, the holding company that is the media company's majority shareholder.

Only Messrs. Moonves, Ianniello, Liding and Schwartz are accused of insider trading in the suit, which also alleges that current and former CBS board members, with Ms. Redstone, failed to disclose that CBS was "beset by a company-wide pattern and practice of sexual harassment, creating a 'culture of fear' and hostile work environment that exposed the company to specific reputational risk and the potential loss of key executives."

The suit is seeking compensatory damages, arguing the value of CBS stock was inflated because the company wasn't honest with shareholders about concerns regarding Mr. Moonves and its culture.

Both CBS and Mr. Moonves denied the accusations.

"The vast majority of sales mentioned in this complaint were made as part of pre-planned selling arrangements designed to comply with applicable securities laws," CBS said in a statement. "The remaining sales were subject to CBS' customary pre-clearance policies and procedures and were properly disclosed. While it would not be appropriate to comment on ongoing litigation, we believe that our policies and procedures are fully in compliance with law."

A spokeswoman for Ms. Redstone declined to comment.

Mr. Schwartz declined to comment and referred all questions to CBS's statement. Representatives for Messrs. Ianniello and Liding also referred to CBS's statement.

A spokesman for Mr. Moonves said the former chairman and chief executive denies any wrongdoing and that "the stock sales in question were made in accordance with an approved SEC Rule 10b5-1 stock sale plan." That rule lets company insiders predetermine the date of stake sales to prevent accusations of trading on nonpublic information.

A look at Mr. Moonves's share sales over the past two years shows he pared down his stake significantly since the fall of 2017.

Mr. Moonves "sold over $53 million worth of stock between mid-December 2017 and May 2018, even as inquiries into his past continued to percolate and after the board scheduled an emergency Sunday meeting in April 2018 to discuss what it believed was a forthcoming article detailing allegations against Moonves," the suit said.

The suit was first filed in August by CBS shareholders Gene Samit and John Lantz, who have now been joined by the Construction Laborers Pension Trust for Southern California.

News of the amended lawsuit was first disclosed by the Hollywood Reporter.

In December, the CBS board said an investigation concluded there were grounds to terminate Mr. Moonves and deny him a $120 million severance package.

Mr. Moonves has denied allegations that he forced himself on anyone or used his position to compel women to engage in sexual activity with him. He has filed an arbitration claim against CBS in an effort to recover some or all of his exit package.

Write to Joe Flint at joe.flint@wsj.com

(END) Dow Jones Newswires

February 12, 2019 19:29 ET (00:29 GMT)

Cbs Corp. (NYSE:CBS.WD)
Gráfico Histórico do Ativo
De Mai 2024 até Jun 2024

Cbs Corp. (NYSE:CBS.WD)
Gráfico Histórico do Ativo
De Jun 2023 até Jun 2024