New York City and Oregon officials are suing the Fox Corporation and its board on behalf of their government pension funds, accusing the media behemoth of neglecting its fiduciary duties to shareholders by airing false statements about the 2020 presidential election that have opened the company to massive defamation lawsuits.
The lawsuit filed in Delaware on 12 September follows high-profile litigation targeting Fox News in the aftermath of the 2020 election, including April’s record-setting settlement stemming from a defamation lawsuit from Dominion Voting Systems. Fox agreed to pay the voting machines company $787.5m, narrowly averting a closely watched trial moments before it started.
New York City’s five pension funds stand at roughly $253bn and represent nearly 800,000 current and retired workers. The funds held about 857,000 shares, valued at $28.1m, as of 31 July, according to The New York Times, which first reported the lawsuit.
“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,” New York City Comptroller Brad Lander said in a statement shared with The Independent.
“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,” he added. “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 state of Oregon, representing a retirement fund for the state’s public employees, has also joined the lawsuit. Oregon holds 150,146 shares of Fox Class A stock and 76,169 shares of Fox Class B stock worth approximately $5.2m as of 31 August, according to the state.
“The board of Fox Corporation took a massive risk in pursuing profits by perpetuating and peddling known falsehoods,” Oregon Attorney General Ellen Rosenblum said in a statement.
“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,” she added.
Oregon’s litigation follows a joint investigation from the state’s Department of Justice and Treasurer’s Office which determined that Fox management harmed its investors, including Oregon’s public employees.
The complaint in Delaware alleges that the Fox board knew that the promotion of false narratives on Fox News exposed the company to defamation claims.
The Independent has requested comment from Fox.
This is a developing story