CBS-Moonves harassment scandal spawned insider trading, LAPD probes

The sexual misconduct scandal that forced the resignation of once-powerful CBS president Les Moonves four years ago has evolved into bicoastal probes of insider trading and police corruption.

New York Attorney General Letitia James announced Wednesday that Moonves and the network will pay a combined total of $30.5 million in an agreement stemming from her office’s investigation, which detailed allegations that CBS executives and a Los Angeles police captain tried to keep sexual assault complaints against Moonves from becoming public.

CBS and Moonves tried to “silence victims, lie to the public, and mislead investors,” James said in a statement, adding that the company “failed its most basic duty to be honest and transparent with the public and investors.”

But the agreement did not include admission of wrongdoing or liability by the company. A spokesperson for Paramount Global, the parent company of CBS, said “we are pleased to resolve this matter,” which 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.”

Meanwhile, the Los Angeles Police Department announced Wednesday that it has launched its own investigation into a former employee that will also seek to determine whether any others were involved in attempting to cover up accusations against Moonves.

“What is most appalling is the alleged breach of trust of a victim of sexual assault, who is among the most vulnerable, by a member of the LAPD,” police chief Michael Moore said in a statement.

A previously settled class-action shareholder lawsuit accounts for $14.75 million of the $30.5 million that CBS and Moonves agreed to pay. As part of this week’s agreement, Paramount agreed to add another $7.25 million to the funds that will be directed to shareholders, and Moonves will contribute $2.5 million. Another $6 million from Paramount will be spent on programs related to sexual harassment and assault.

A lawyer for Moonves did not return the Washington Post’s inquiry.

The agreement comes four years after Moonves, once considered a media kingmaker, resigned from his perch atop CBS after several women accused him of sexual misconduct in stories published by the New Yorker.

Shortly after, the company launched its own investigation, found cause for firing him and denied him millions in severance. Moonves’ lawyer at the time said the former executive “vehemently denies any nonconsensual sexual relations and cooperated extensively and fully with (company) investigators.”

On Wednesday, the New York attorney general’s office offered details about what it said was happening behind the scenes at CBS in the fall of 2017, at a time when bombshell reporting about Harvey Weinstein had triggered the acceleration of the #MeToo movement.

According to James’s investigation, a Los Angeles police captain – unnamed in her report – left a voice mail for a CBS executive saying someone had just filed a sexual assault complaint against Moonves with the Hollywood station. The captain then shared an unredacted police report – including the accuser’s identity – which ended up in the hands of Moonves and other executives. Those executives spent months trying to suppress the news of the allegation and pressured the accuser not to take her story to the media, the report alleges.

Meanwhile, Moonves in public described #MeToo as “a watershed moment” and cast himself as sympathetic to the movement. “I think it’s important that a company’s culture will not allow for this, And that’s the thing that’s far-reaching,” he said at an event in late November 2017. “There’s a lot we’re learning. There’s a lot we didn’t know.” He approved the firing of star anchor Charlie Rose after a Washington Post investigation detailed allegations of sexual harassment allegations against him.

The state attorney general’s report noted that CBS around the same time filed papers with the U.S. Securities and Exchange Commission stating that its business depended on Moonves, without disclosing it knew about the police report and the impact it could have as “risk factors.”

The report alleges that CBS executives knew claims against Moonves’ could pose problems for the company. Weeks before the New Yorker story, the company authorized communications executive Gil Schwartz – who allegedly knew about the brewing crisis – to sell shares that were then worth more than $8 million.

The New York attorney general’s office said such actions violated the state’s investor protection laws. Company stock prices slumped after news of Moonves’ alleged misconduct appeared in the media.

The report also stated that the day Moonves resigned, the police captain sent a text a company executive, saying “we worked so hard to try to avoid this day. I am so completely sad.”

The Los Angeles Police Department on Wednesday identified the captain as retired commander Cory Palka. Messages left for Palka went unreturned. Schwartz, the CBS communications executive, died in 2020.