CBS Hit with $40M Class Action Suit over Collapse of Its Federal Credit Union

Labor News, Industry News

Reprinted from Deadline Hollywood by Erik Pedersen on August 12, 2019.

The CBS Employees Federal Credit Union was shut down in May, two months after its longtime manager was arrested and charged with embezzling more than $40 million from it over two decades. Now, with Edward Rostohar having pled guilty and set to be sentenced next month, CBS is facing a class action by its employees to recover that money.

In an 18-page complaint filed in Los Angeles Superior Court (read it here), the workers led by named plaintiff Victor Webb are suing over “the failure of the Board of Directors and the Supervisory Committee of CBS Employees to exercise reasonable oversight of the Credit Union’s management and allowing former Manager and CEO Edward Martin Rostohar to embezzle more than $40 million from the Credit Union.”

According to an affidavit filed with the original criminal complaint, beginning before 2000 and continuing until his March 15 arrest, Rostohar used his longtime position as a manager at the federally insured credit union to make online payments to himself or forged the signature of another employee on checks to himself. The feds had alleged that Rostohar spent the money on gambling and expensive cars and jewelry. Read more details of the case here. …

Deadline Hollywood 8/12

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About Jeffrey Burman 4639 Articles
Jeff Burman represents assistant editors on the Guild’s Board of Directors. He can be reached at jeffrey.s.burman.57@gmail.com.

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