An amended lawsuit say stock sales from Moonves, Joseph Ianniello and other executives amount to evidence of knowing wrongfulness and fraudulent motive.

On July 27, The New Yorker published an exposé that would rock CBS and eventually lead to the departure of its chief Leslie Moonves, accused by several women of unwanted sexual advances. That journalist Ronan Farrow was working on this blockbuster story was an open secret. Not everyone knew, though, and on Monday, suing CBS shareholders pointed to more than $200 million in insider stock sales as alleged evidence of a fraud.

The shareholder leading the suit is Construction Laborers Pension Trust for Southern California. Other shareholders first brought putative class actions not long after the story in The New Yorker, alleging that CBS failed to disclose information in proxy statements that would have a material effect on its business.

Now, in an amended consolidated complaint, the plaintiffs are going a step further in an attempt to show CBS executives had knowledge of wrongness.

"The timing and amount of the Class Period CBS stock sales by these executives were unusual and suspicious, and further demonstrate defendants Moonves, [then COO Joseph] Ianniello and [chief accounting officer Larry] Liding’s motive to commit fraud."

The amended complaint includes a chart of the movement of CBS' stock dating all the way back to the time that Roger Ailes resigned from Fox News following allegations of sexual harassment from Gretchen Carlson and others. The story in the suit that is told is that while CBS was telling everyone that it was committed to zero-tolerance sexual misconduct and as Moonves was being hailed as a steward of stability, CBS' culture was rotten, and that executives had affirmative duties to do something.

CBS' share price rose significantly in the months following Ailes' departure, and while other factors might have been responsible for this, the company's stock price was relatively stable when allegations against Harvey Weinstein set off the #metoo movement. At the time, as noted in the chart, Moonves called #metoo "a watershed movement, adding "it's important that a company's culture not allow this."

"[B]efore the disclosures about the Company’s sexual harassment and hostile work environment problems were revealed to the market, defendant Moonves and other CBS executives...collectively sold over 3.4 million shares of CBS stock during the Class Period, totaling over $200 million in proceeds, to the unsuspecting investing public, thereby profiting from their failure to disclose the truth to the market."

As in the earlier iteration of this lawsuit, the suing stockholders point to ethical commitments CBS made to its employees and shareholders. Now, boosted by the subsequent investigation by CBS board into Moonves as well as reporting by journalists, the complaint adds notes about the "actively concealed" LAPD criminal sexual assault probe as well as what board members heard about Moonves' conduct before the publication of The New Yorker story.

After recounting the sexual harassment allegations against Moonves plus Charlie Rose and producers working on 60 Minutes, the shareholders provide a table of insider stock sales in 2017 and the first six months of 2018. They count nearly $29 million in stock sales from Ianniello, $2.3 million from Liding, $155 million from Moonves and more than $15 million from former CBS communications officer Gil Schwartz.

"Taken collectively, these insider sales support an inference of scienter because they were timed to capitalize on CBS’s inflated stock price before defendant Moonves’s misconduct and the pervasive sexual harassment that permeated the Company was revealed to the market," continues the suit.

The plaintiffs raise various legal theories about CBS' alleged need to disclose the truth about the sexual misconduct of its top executive, from 10-K warnings about the potential impact from the loss of any key personnel to Item 303 of SEC Regulation S-K, said to require disclosure of "known trends and uncertainties."

The complaint even includes the suggestion that CBS should have revealed what Farrow was working on.

"By late 2017, Defendants were aware that Farrow was investigating and writing an article on CBS, defendant Moonves and the Company’s culture of sexual harassment," states the complaint. "Defendants knew that the publication of this article could have a negative impact on the Company and its continuing operations yet they failed to disclose it in their SEC filings."

The lawsuit, now being led by the firm of Robbins Geller, demands compensatory damages.

Update: CBS has issued this response:

"CBS 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 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. While it would not be appropriate to comment on ongoing litigation, we believe that our policies and procedures are fully in compliance with law.”