CBS shareholders have accused current and former top officials at the company of insider trading, alleging that executives including former CEO Leslie Moonves sold off shares before the company’s ongoing sexual misconduct scandal became public knowledge.
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In an amended complaint filed in federal court as part of a class-action lawsuit against CBS, the shareholders accuse Moonves, acting CBS CEO Joe Ianniello, former Chief Accounting Officer Lawrence Liding and former communications head Gil Schwartz of selling shares worth more than $200 million. The transactions occurred before CBS revealed last July Moonves was under investigation for misconduct in the wake of exposes by The New Yorker and the New York Times.
Shareholders allege the stock sale was “timed to capitalize on CBS’s inflated stock price before defendant [Les] Moonves’s misconduct and the pervasive sexual harassment that permeated the company was revealed to the market,” the complaint said, according to Deadline.
CBS shares posted steep declines after allegations regarding Moonves' misconduct were revealed. Moonves stepped down as CEO last September, but has repeatedly denied wrongdoing.
CBS rejected the allegations of insider trading, noting in a statement that it has “in place clear policies and procedures relating to CBS stock sales by senior executives of the company.”
“Executives who possess material information about CBS that has not been made public may not use that information in selling CBS stock,” the company said. “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. The remaining sales were subject to CBS’ customary pre-clearance policies and procedures and were properly disclosed.”