- Company Name
- CBS Corporation
- Stock Symbol
- Class Period
- February 14, 2014 to July 27, 2018
- Motion Deadline
- October 26, 2018
- Southern District of New York
The complaint charges CBS and certain of its officers with violations of the Securities Exchange Act of 1934. CBS is a mass media company with operations in the entertainment, cable network, publishing, and local media segments.
The complaint alleges that throughout the Class Period, defendants made materially false and misleading statements and/or failed to disclose adverse information regarding the Company's business and compliance policies. Specifically, defendants failed to disclose that CBS executives, including the Company's Chairman and Chief Executive Officer, Leslie Moonves, had engaged in widespread sexual harassment at CBS, that CBS's enforcement of its own purported policies was inadequate to prevent such conduct, and that the 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. As a result of this information being withheld from the market, CBS securities traded at artificially inflated prices during the Class Period, with its stock price reaching highs of more than $65 per share.
Then on July 27, 2018, various media outlets reported that The New Yorker would shortly publish an article discussing an investigative report detailing allegations of sexual misconduct by Moonves and other executives at the Company. According to The New York Times, the article was written by investigative journalist Ronan Farrow and describes “sexual harassment alleged by six women in the entertainment business against Mr. Moonves,” and “links the accusations to a broader culture of sexual harassment at CBS, with special focus on CBS News.” According to The New York Times, the article “outlines allegations of sexual harassment by several women against a number of CBS News executives,” including Jeffrey Fager, the former head of the news division, and states that “CBS News executives were still promoted even after allegations of misconduct.” On this news, the price of CBS stock fell $3.52 per share, or more than 6%, to close at $54.01 per share on July 27, 2018.