This is a situation where lawsuits will be flying and a lot of very wealthy people who can afford lawyers and lost lots of money will be casting about for any deep pockets they can find and any scapegoats they can blame.

It is likely that nobody will sue this CEO, but a nontrivial part of that is precisely that this guy is correctly covering his bum. By being ready for this battle, he will probably never have to fight it. And that's only "probably". I wouldn't guarantee it. I would have some clauses about this written into my contract before I took the job.