The New York City Pension Funds filed a lawsuit Tuesday against both Fox Corporation and its board, accusing the organization of “neglecting its duty to shareholders” by creating the opportunity of defamation lawsuits due to “the persistent broadcasting of falsehoods about the 2020 presidential election.”
“Fox’s board of directors has blatantly disregarded the need for journalistic standards and failed to put safeguards in place despite having a business model that invites defamation litigation,” Brad Lander, New York City’s comptroller, said in a statement provided to TheWrap. “A lack of journalistic standards and a proper strategy to mitigate defamation has clearly harmed Fox’s reputation and threatens their bottom line and long-term profitability. Clear governance systems are absolutely necessary for the long-term health of a company. As Fox’s board continues to ignore these red flags, we are holding them accountable as long-term shareholders.”
The comptroller is in charge of the city’s pension funds, heading the five funds that represent almost 800,000 retired and current works and $253 billion. The funds were joined by the State of Oregon, who also filed a suit on behalf of the state’s public employees retirement fund.
Oregon’s Attorney General Ellen Rosenblum explained, “The board of Fox Corporation took a massive risk in pursuing profits by perpetuating and peddling known falsehoods. The directors’ choices exposed themselves and the company to liability and exposed their shareholders to significant risks. That is the crux of our lawsuit, and we look forward to making our case in court.”
The two plaintiffs hold approximately $33.3 million in shares in Fox Corp.
Details of the suit have not been shared publicly, and it will remain under seal for five days. The lawsuit was shared with the New York Times.
The newspaper reports that in part the lawsuit accuses Fox Corp. of attempting to “appease its viewers after the results of the 2020 U.S. presidential election by amplifying false claims from former President Donald J. Trump and his allies that voting had been rigged.” It further accuses Fox Corp. and its board directors of being aware of the risk of defamation lawsuits and doing little to mitigate that risk.
The State of Oregon joined the lawsuit following the conclusion of a joint Oregon Department of Justice / Oregon Treasurer’s Office investigation that “found that Fox’s management on behalf of the company harmed investors.”
Oregon’s Treasurer Tobias Read said that the lawsuit is about holding Fox Corp. “including Rupert and Lachlan Murdoch, accountable for their decisions. We believe that this action is necessary in fulfilling our obligation to our beneficiaries.”
