James Franco to pay $2.2 million in sexual misconduct, fraud settlement

Without admitting wrongdoing, actor James Franco and other defendants named have agreed to pay just over $2.2 million to settle a lawsuit accusing him and his associates of sexual exploitation situations and fraud, according to court documents obtained by ABC News that were filed June 24 and made public Wednesday.

Two former students accused Franco and his partners of encouraging actresses to disrobe as part of intimate scenes that were being rehearsed, with those who obliged allegedly given preferential treatment, according to court documents. Plaintiffs alleged that the defendants staged an acting class as an excuse for them to exploit young women.

The class-action lawsuit, which was filed in October 2019, also alleged that those who took part in classes taught by Franco at the now-closed Studio 4 Film School in New York and Los Angeles, were the victims of fraud. Franco ran the school from 2014 to 2017.

The settlement, which still needs to be approved by a judge, would award $894,000 to the named plaintiffs claiming sexual exploitation and another $1,341,000 allocated to a common fund for individuals in relation to fraud claims.

The deal would also require his accusers, including both those alleging sexual exploitation and fraud, to release their claims against the actor, the documents said.

It also results in both parties agreeing to a joint statement, which reads, "While Defendants continue to deny the allegations in the complaint, they acknowledge that Plaintiffs have raised important issues; and all parties strongly believe that now is a critical time to focus on address the mistreatment of women in Hollywood."

The statement continued, "All agree on the need to make sure that no one in the entertainment industry -- regardless of sex, race, religion, disability, ethnicity, background, gender or sexual orientation -- faces discrimination, harassment or prejudice of any kind."