Last month, a New Yorker exposé sent CBS stock tumbling after revealing a pattern of sexual misconduct from president Les Moonves that bled into the network’s lax company culture. CBS is currently undertaking its own independent investigation, but now it will need to contend with a shareholder class action lawsuit stemming from the allegations.
The Hollywood Reporter notes that shareholder Gene Samit’s suit accuses CBS of making a material omission by failing to disclose the allegations against Moonves. A 2014 proxy statement included the company’s standards for ethical conduct, and the suit alleges that the network has failed to uphold its “zero tolerance” policy toward sexual harassment and discrimination. It also notes a 2016 letter from Mooves that urged employees to commit to a harassment-free workplace, which, when the guy running the show won’t comply, doesn’t work so well.
Samit will represent a class of CBS stockholders who purchased securities in the four years prior to The New Yorker story. Meanwhile, the stock, much like the beads of sweat on Moonves’ forehead, continues to trickle downward.