The Wall Street Journal: Moonves, other CBS execs accused of insider trading in shareholder suit

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.

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 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, Moonves sold stock valued at $155.3 million between June 2017 and May 2018. During that time, the suit said, CBS CBS, +0.60%   was aware of media inquiries about sexual-harassment allegations against Moonves, who resigned in September.

Besides 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 Moonves, Ianniello, Liding and Schwartz are accused of insider trading in the suit, which also alleges that current and former CBS board members, with 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.”

An expanded version of this report appears on WSJ.com.

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