Salem, Ore. — Oregon Attorney General Ellen Rosenblum has initiated a stockholder derivative lawsuit against the board of directors of Fox Corporation, the parent company of Fox News, citing breach of fiduciary duty. The Oregon Public Employee Retirement Fund (OPERF), a Fox investor, is represented in this action, along with Oregon Treasurer Tobias Read, whose office collaborated in the investigation.
AG Rosenblum stated, “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.”
An investigation jointly conducted by the Oregon Department of Justice and the Oregon Treasurer’s Office earlier this year found that Fox’s management, on behalf of the company, caused harm to investors, including Oregon’s public employees. As of August 31, 2023, Oregon held 150,146 shares of Fox Class A stock and 76,169 shares of Fox Class B stock, with a total value of approximately $5.2 million.
The complaint, filed in Delaware Chancery Court, alleges that Fox’s Board was aware that Fox News’s promotion of political narratives, regardless of the factual accuracy of the underlying assertions, created significant exposure to defamation charges.
Furthermore, by pushing narratives that catered to their audience, irrespective of factual accuracy, Fox’s Board should have been particularly attuned to the risks of defamation. Fox’s business model involves promoting false claims, including allegations that the murdered Democratic National Committee staffer Seth Rich provided hacked emails to WikiLeaks and continuing with false claims that election technology companies U.S. Dominion, Inc. and Smartmatic USA Corp. rigged the 2020 presidential election.
The lawsuit, in which the New York City Pension Funds is a co-plaintiff, also contends that Fox made no genuine efforts to monitor or mitigate defamation risk, in contrast to nearly every other major media organization in the country.
Treasurer Tobias Read emphasized the responsibility of safeguarding the retirement investments of Oregon’s public servants, stating, “We aim to hold Fox’s board of directors, including Rupert and Lachlan Murdoch, accountable for their decisions. We believe that this action is necessary in fulfilling our obligation to our beneficiaries.”